Correlation Between Heungkuk Metaltech and Daiyang Metal
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Daiyang Metal 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 Daiyang Metal 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 Daiyang Metal Co, you can compare the effects of market volatilities on Heungkuk Metaltech and Daiyang Metal 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 Daiyang Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Daiyang Metal.
Diversification Opportunities for Heungkuk Metaltech and Daiyang Metal
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Heungkuk and Daiyang is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Daiyang Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daiyang Metal 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 Daiyang Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daiyang Metal has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Daiyang Metal go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Daiyang Metal
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 0.43 times more return on investment than Daiyang Metal. However, Heungkuk Metaltech CoLtd is 2.33 times less risky than Daiyang Metal. It trades about -0.05 of its potential returns per unit of risk. Daiyang Metal Co is currently generating about -0.2 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 (7,500) from holding Heungkuk Metaltech CoLtd or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Daiyang Metal Co
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Daiyang Metal |
Heungkuk Metaltech and Daiyang Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Daiyang Metal
The main advantage of trading using opposite Heungkuk Metaltech and Daiyang Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Daiyang Metal 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 Daiyang Metal will offset losses from the drop in Daiyang Metal's long position.| Heungkuk Metaltech vs. Hyunwoo Industrial Co | Heungkuk Metaltech vs. Namhwa Industrial Co | Heungkuk Metaltech vs. Daiyang Metal Co | Heungkuk Metaltech vs. Handok Clean Tech |
| Daiyang Metal vs. LG Household Healthcare | Daiyang Metal vs. Daejung Chemicals Metals | Daiyang Metal vs. LG Chemicals | Daiyang Metal vs. SK Chemicals 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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