Correlation Between Myoung Shin and Echomarketing CoLtd
Can any of the company-specific risk be diversified away by investing in both Myoung Shin and Echomarketing CoLtd 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 Echomarketing CoLtd 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 Echomarketing CoLtd, you can compare the effects of market volatilities on Myoung Shin and Echomarketing CoLtd 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 Echomarketing CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Myoung Shin and Echomarketing CoLtd.
Diversification Opportunities for Myoung Shin and Echomarketing CoLtd
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Myoung and Echomarketing is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Myoung Shin Industrial and Echomarketing CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Echomarketing 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 Echomarketing CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Echomarketing CoLtd has no effect on the direction of Myoung Shin i.e., Myoung Shin and Echomarketing CoLtd go up and down completely randomly.
Pair Corralation between Myoung Shin and Echomarketing CoLtd
Assuming the 90 days trading horizon Myoung Shin Industrial is expected to under-perform the Echomarketing CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, Myoung Shin Industrial is 1.09 times less risky than Echomarketing CoLtd. The stock trades about -0.16 of its potential returns per unit of risk. The Echomarketing CoLtd is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,042,000 in Echomarketing CoLtd on September 3, 2024 and sell it today you would lose (85,000) from holding Echomarketing CoLtd or give up 8.16% 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. Echomarketing CoLtd
Performance |
| Timeline |
| Myoung Shin Industrial |
| Echomarketing CoLtd |
Myoung Shin and Echomarketing CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Myoung Shin and Echomarketing CoLtd
The main advantage of trading using opposite Myoung Shin and Echomarketing CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Myoung Shin position performs unexpectedly, Echomarketing CoLtd 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 Echomarketing CoLtd will offset losses from the drop in Echomarketing CoLtd's long position.| Myoung Shin vs. Busan Industrial Co | Myoung Shin vs. UNISEM Co | Myoung Shin vs. RPBio Inc | Myoung Shin vs. Finebesteel |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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