Correlation Between Heungkuk Metaltech and Sinil Pharmaceutical
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Sinil Pharmaceutical 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 Sinil Pharmaceutical 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 Sinil Pharmaceutical Co, you can compare the effects of market volatilities on Heungkuk Metaltech and Sinil Pharmaceutical 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 Sinil Pharmaceutical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Sinil Pharmaceutical.
Diversification Opportunities for Heungkuk Metaltech and Sinil Pharmaceutical
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Heungkuk and Sinil is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Sinil Pharmaceutical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinil Pharmaceutical 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 Sinil Pharmaceutical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinil Pharmaceutical has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Sinil Pharmaceutical go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Sinil Pharmaceutical
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 0.84 times more return on investment than Sinil Pharmaceutical. However, Heungkuk Metaltech CoLtd is 1.19 times less risky than Sinil Pharmaceutical. It trades about -0.05 of its potential returns per unit of risk. Sinil Pharmaceutical Co is currently generating about -0.26 per unit of risk. If you would invest 491,000 in Heungkuk Metaltech CoLtd on August 28, 2024 and sell it today you would lose (8,000) from holding Heungkuk Metaltech CoLtd or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Sinil Pharmaceutical Co
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Sinil Pharmaceutical |
Heungkuk Metaltech and Sinil Pharmaceutical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Sinil Pharmaceutical
The main advantage of trading using opposite Heungkuk Metaltech and Sinil Pharmaceutical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Sinil Pharmaceutical 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 Sinil Pharmaceutical will offset losses from the drop in Sinil Pharmaceutical's long position.| Heungkuk Metaltech vs. Daishin Information Communications | Heungkuk Metaltech vs. Lotte Data Communication | Heungkuk Metaltech vs. Mobile Appliance | Heungkuk Metaltech vs. Korea Information Communications |
| Sinil Pharmaceutical vs. Dongil Metal Co | Sinil Pharmaceutical vs. Youngsin Metal Industrial | Sinil Pharmaceutical vs. Heungkuk Metaltech CoLtd | Sinil Pharmaceutical vs. Ssangyong Information Communication |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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