Correlation Between Heungkuk Metaltech and National Plastic
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and National Plastic 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 Heungkuk Metaltech and National Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heungkuk Metaltech CoLtd and National Plastic Co, you can compare the effects of market volatilities on Heungkuk Metaltech and National Plastic 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 Heungkuk Metaltech with a short position of National Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and National Plastic.
Diversification Opportunities for Heungkuk Metaltech and National Plastic
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heungkuk and National is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and National Plastic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Plastic and Heungkuk Metaltech 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 Heungkuk Metaltech CoLtd are associated (or correlated) with National Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Plastic has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and National Plastic go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and National Plastic
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 0.87 times more return on investment than National Plastic. However, Heungkuk Metaltech CoLtd is 1.15 times less risky than National Plastic. It trades about -0.03 of its potential returns per unit of risk. National Plastic Co is currently generating about -0.04 per unit of risk. If you would invest 487,500 in Heungkuk Metaltech CoLtd on August 31, 2024 and sell it today you would lose (5,500) from holding Heungkuk Metaltech CoLtd or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. National Plastic Co
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| National Plastic |
Heungkuk Metaltech and National Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and National Plastic
The main advantage of trading using opposite Heungkuk Metaltech and National Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, National Plastic 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 National Plastic will offset losses from the drop in National Plastic's long position.| Heungkuk Metaltech vs. Korea New Network | Heungkuk Metaltech vs. ICD Co | Heungkuk Metaltech vs. DYPNF CoLtd | Heungkuk Metaltech vs. Busan Industrial Co |
| National Plastic vs. Shinhan Financial Group | National Plastic vs. Koryo Credit Information | National Plastic vs. KakaoBank Corp | National Plastic vs. T3 Entertainment 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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