Correlation Between Heungkuk Metaltech and Pungguk Ethanol
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Pungguk Ethanol 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 Pungguk Ethanol 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 Pungguk Ethanol Industrial, you can compare the effects of market volatilities on Heungkuk Metaltech and Pungguk Ethanol 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 Pungguk Ethanol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Pungguk Ethanol.
Diversification Opportunities for Heungkuk Metaltech and Pungguk Ethanol
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Heungkuk and Pungguk is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Pungguk Ethanol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pungguk Ethanol Indu 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 Pungguk Ethanol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pungguk Ethanol Indu has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Pungguk Ethanol go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Pungguk Ethanol
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 0.93 times more return on investment than Pungguk Ethanol. However, Heungkuk Metaltech CoLtd is 1.08 times less risky than Pungguk Ethanol. It trades about -0.06 of its potential returns per unit of risk. Pungguk Ethanol Industrial is currently generating about -0.11 per unit of risk. If you would invest 542,000 in Heungkuk Metaltech CoLtd on September 3, 2024 and sell it today you would lose (65,000) from holding Heungkuk Metaltech CoLtd or give up 11.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Pungguk Ethanol Industrial
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Pungguk Ethanol Indu |
Heungkuk Metaltech and Pungguk Ethanol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Pungguk Ethanol
The main advantage of trading using opposite Heungkuk Metaltech and Pungguk Ethanol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Pungguk Ethanol 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 Pungguk Ethanol will offset losses from the drop in Pungguk Ethanol's long position.| Heungkuk Metaltech vs. Daewoo Engineering Construction | Heungkuk Metaltech vs. DataSolution | Heungkuk Metaltech vs. Seohee Construction Co | Heungkuk Metaltech vs. Air Busan Co |
| Pungguk Ethanol vs. SCI Information Service | Pungguk Ethanol vs. Cots Technology Co | Pungguk Ethanol vs. Shinsegae Information Communication | Pungguk Ethanol vs. Taegu Broadcasting |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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