Correlation Between Heungkuk Metaltech and Jeju Bank
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Jeju Bank 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 Jeju Bank 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 Jeju Bank, you can compare the effects of market volatilities on Heungkuk Metaltech and Jeju Bank 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 Jeju Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Jeju Bank.
Diversification Opportunities for Heungkuk Metaltech and Jeju Bank
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Heungkuk and Jeju is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Jeju Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Bank 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 Jeju Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Bank has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Jeju Bank go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Jeju Bank
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 1.68 times more return on investment than Jeju Bank. However, Heungkuk Metaltech is 1.68 times more volatile than Jeju Bank. It trades about -0.1 of its potential returns per unit of risk. Jeju Bank is currently generating about -0.19 per unit of risk. If you would invest 518,000 in Heungkuk Metaltech CoLtd on November 7, 2024 and sell it today you would lose (16,000) from holding Heungkuk Metaltech CoLtd or give up 3.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Jeju Bank
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Jeju Bank |
Heungkuk Metaltech and Jeju Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Jeju Bank
The main advantage of trading using opposite Heungkuk Metaltech and Jeju Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Jeju Bank 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 Jeju Bank will offset losses from the drop in Jeju Bank's long position.| Heungkuk Metaltech vs. Finebesteel | Heungkuk Metaltech vs. Dongbang Transport Logistics | Heungkuk Metaltech vs. Display Tech Co | Heungkuk Metaltech vs. Sangsin Energy Display |
| Jeju Bank vs. NICE Information Service | Jeju Bank vs. Nice Information Telecommunication | Jeju Bank vs. SAMG Entertainment Co | Jeju Bank vs. Alton Sports CoLtd |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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