Correlation Between Myoung Shin and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both Myoung Shin and Heungkuk Metaltech at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Myoung Shin and Heungkuk Metaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Myoung Shin Industrial and Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on Myoung Shin and Heungkuk Metaltech and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Myoung Shin with a short position of Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Myoung Shin and Heungkuk Metaltech.
Diversification Opportunities for Myoung Shin and Heungkuk Metaltech
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Myoung and Heungkuk is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Myoung Shin Industrial and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd and Myoung Shin is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Myoung Shin Industrial are associated (or correlated) with Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of Myoung Shin i.e., Myoung Shin and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between Myoung Shin and Heungkuk Metaltech
Assuming the 90 days trading horizon Myoung Shin Industrial is expected to under-perform the Heungkuk Metaltech. In addition to that, Myoung Shin is 1.65 times more volatile than Heungkuk Metaltech CoLtd. It trades about -0.01 of its total potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about -0.02 per unit of volatility. If you would invest 580,745 in Heungkuk Metaltech CoLtd on September 4, 2024 and sell it today you would lose (98,245) from holding Heungkuk Metaltech CoLtd or give up 16.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Myoung Shin Industrial vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| Myoung Shin Industrial |
| Heungkuk Metaltech CoLtd |
Myoung Shin and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Myoung Shin and Heungkuk Metaltech
The main advantage of trading using opposite Myoung Shin and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Myoung Shin position performs unexpectedly, Heungkuk Metaltech can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.| Myoung Shin vs. Heungkuk Metaltech CoLtd | Myoung Shin vs. Daejung Chemicals Metals | Myoung Shin vs. Histeel | Myoung Shin vs. Hankook Steel Co |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
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