Correlation Between Heungkuk Metaltech and Jinro Distillers
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Jinro Distillers 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 Jinro Distillers 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 Jinro Distillers Co, you can compare the effects of market volatilities on Heungkuk Metaltech and Jinro Distillers 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 Jinro Distillers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Jinro Distillers.
Diversification Opportunities for Heungkuk Metaltech and Jinro Distillers
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Heungkuk and Jinro is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Jinro Distillers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinro Distillers 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 Jinro Distillers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinro Distillers has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Jinro Distillers go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Jinro Distillers
Assuming the 90 days trading horizon Heungkuk Metaltech is expected to generate 5.73 times less return on investment than Jinro Distillers. In addition to that, Heungkuk Metaltech is 3.05 times more volatile than Jinro Distillers Co. It trades about 0.03 of its total potential returns per unit of risk. Jinro Distillers Co is currently generating about 0.52 per unit of volatility. If you would invest 1,607,794 in Jinro Distillers Co on October 14, 2024 and sell it today you would earn a total of 103,206 from holding Jinro Distillers Co or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Jinro Distillers Co
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Jinro Distillers |
Heungkuk Metaltech and Jinro Distillers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Jinro Distillers
The main advantage of trading using opposite Heungkuk Metaltech and Jinro Distillers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Jinro Distillers 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 Jinro Distillers will offset losses from the drop in Jinro Distillers' long position.| Heungkuk Metaltech vs. Ssangyong Materials Corp | Heungkuk Metaltech vs. LS Materials | Heungkuk Metaltech vs. iNtRON Biotechnology | Heungkuk Metaltech vs. Polaris Office Corp |
| Jinro Distillers vs. EV Advanced Material | Jinro Distillers vs. Daishin Information Communications | Jinro Distillers vs. Kolon Plastics | Jinro Distillers vs. Ssangyong Materials Corp |
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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