Correlation Between Heungkuk Metaltech and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Korea Alcohol 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 Korea Alcohol 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 Korea Alcohol Industrial, you can compare the effects of market volatilities on Heungkuk Metaltech and Korea Alcohol 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 Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Korea Alcohol.
Diversification Opportunities for Heungkuk Metaltech and Korea Alcohol
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Heungkuk and Korea is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial 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 Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Korea Alcohol go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Korea Alcohol
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 1.18 times more return on investment than Korea Alcohol. However, Heungkuk Metaltech is 1.18 times more volatile than Korea Alcohol Industrial. It trades about 0.02 of its potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.04 per unit of risk. If you would invest 506,873 in Heungkuk Metaltech CoLtd on October 14, 2024 and sell it today you would earn a total of 24,127 from holding Heungkuk Metaltech CoLtd or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Korea Alcohol Industrial
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Korea Alcohol Industrial |
Heungkuk Metaltech and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Korea Alcohol
The main advantage of trading using opposite Heungkuk Metaltech and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.| Heungkuk Metaltech vs. Ssangyong Materials Corp | Heungkuk Metaltech vs. LS Materials | Heungkuk Metaltech vs. iNtRON Biotechnology | Heungkuk Metaltech vs. Polaris Office Corp |
| Korea Alcohol vs. Nable Communications | Korea Alcohol vs. Korea Information Communications | Korea Alcohol vs. LG Household Healthcare | Korea Alcohol vs. Nice Information Telecommunication |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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