Correlation Between Myoung Shin and Cuckoo Electronics
Can any of the company-specific risk be diversified away by investing in both Myoung Shin and Cuckoo Electronics 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 Cuckoo Electronics 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 Cuckoo Electronics Co, you can compare the effects of market volatilities on Myoung Shin and Cuckoo Electronics 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 Cuckoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Myoung Shin and Cuckoo Electronics.
Diversification Opportunities for Myoung Shin and Cuckoo Electronics
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Myoung and Cuckoo is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Myoung Shin Industrial and Cuckoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuckoo Electronics 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 Cuckoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuckoo Electronics has no effect on the direction of Myoung Shin i.e., Myoung Shin and Cuckoo Electronics go up and down completely randomly.
Pair Corralation between Myoung Shin and Cuckoo Electronics
Assuming the 90 days trading horizon Myoung Shin Industrial is expected to under-perform the Cuckoo Electronics. In addition to that, Myoung Shin is 1.7 times more volatile than Cuckoo Electronics Co. It trades about -0.05 of its total potential returns per unit of risk. Cuckoo Electronics Co is currently generating about 0.07 per unit of volatility. If you would invest 2,005,000 in Cuckoo Electronics Co on September 3, 2024 and sell it today you would earn a total of 305,000 from holding Cuckoo Electronics Co or generate 15.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Myoung Shin Industrial vs. Cuckoo Electronics Co
Performance |
| Timeline |
| Myoung Shin Industrial |
| Cuckoo Electronics |
Myoung Shin and Cuckoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Myoung Shin and Cuckoo Electronics
The main advantage of trading using opposite Myoung Shin and Cuckoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Myoung Shin position performs unexpectedly, Cuckoo Electronics 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 Cuckoo Electronics will offset losses from the drop in Cuckoo Electronics' long position.| Myoung Shin vs. Busan Industrial Co | Myoung Shin vs. UNISEM Co | Myoung Shin vs. RPBio Inc | Myoung Shin vs. Finebesteel |
| Cuckoo Electronics vs. CG Hi Tech | Cuckoo Electronics vs. Digital Power Communications | Cuckoo Electronics vs. Lotte Data Communication | Cuckoo Electronics vs. Innowireless Co |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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