Correlation Between Heungkuk Metaltech and Korea Information
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Korea Information 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 Information 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 Information Communications, you can compare the effects of market volatilities on Heungkuk Metaltech and Korea Information 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 Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Korea Information.
Diversification Opportunities for Heungkuk Metaltech and Korea Information
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Heungkuk and Korea is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Korea Information go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Korea Information
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 1.93 times more return on investment than Korea Information. However, Heungkuk Metaltech is 1.93 times more volatile than Korea Information Communications. It trades about 0.15 of its potential returns per unit of risk. Korea Information Communications is currently generating about 0.2 per unit of risk. If you would invest 498,265 in Heungkuk Metaltech CoLtd on October 22, 2024 and sell it today you would earn a total of 23,735 from holding Heungkuk Metaltech CoLtd or generate 4.76% 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. Korea Information Communicatio
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Korea Information |
Heungkuk Metaltech and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Korea Information
The main advantage of trading using opposite Heungkuk Metaltech and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Korea Information 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 Information will offset losses from the drop in Korea Information's long position.The idea behind Heungkuk Metaltech CoLtd and Korea Information Communications pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Korea Information vs. Nh Investment And | Korea Information vs. DSC Investment | Korea Information vs. Green Cross Medical | Korea Information vs. Korean Drug 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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