Correlation Between Heungkuk Metaltech and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and BIT Computer 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 BIT Computer 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 BIT Computer Co, you can compare the effects of market volatilities on Heungkuk Metaltech and BIT Computer 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 BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and BIT Computer.
Diversification Opportunities for Heungkuk Metaltech and BIT Computer
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Heungkuk and BIT is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer 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 BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and BIT Computer go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and BIT Computer
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 0.55 times more return on investment than BIT Computer. However, Heungkuk Metaltech CoLtd is 1.8 times less risky than BIT Computer. It trades about 0.0 of its potential returns per unit of risk. BIT Computer Co is currently generating about -0.01 per unit of risk. If you would invest 562,038 in Heungkuk Metaltech CoLtd on October 16, 2024 and sell it today you would lose (39,038) from holding Heungkuk Metaltech CoLtd or give up 6.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. BIT Computer Co
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| BIT Computer |
Heungkuk Metaltech and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and BIT Computer
The main advantage of trading using opposite Heungkuk Metaltech and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.| Heungkuk Metaltech vs. E Investment Development | Heungkuk Metaltech vs. Inzi Display CoLtd | Heungkuk Metaltech vs. LG Chemicals | Heungkuk Metaltech vs. Iljin Display |
| BIT Computer vs. Korea Alcohol Industrial | BIT Computer vs. Digital Multimedia Technology | BIT Computer vs. Atinum Investment Co | BIT Computer vs. Barunson Entertainment Arts |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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