Correlation Between Heungkuk Metaltech and Korea Real
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Korea Real 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 Real 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 Real Estate, you can compare the effects of market volatilities on Heungkuk Metaltech and Korea Real 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 Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Korea Real.
Diversification Opportunities for Heungkuk Metaltech and Korea Real
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Heungkuk and Korea is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Korea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Real Estate 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 Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Real Estate has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Korea Real go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Korea Real
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to under-perform the Korea Real. In addition to that, Heungkuk Metaltech is 6.03 times more volatile than Korea Real Estate. It trades about -0.09 of its total potential returns per unit of risk. Korea Real Estate is currently generating about -0.16 per unit of volatility. If you would invest 100,500 in Korea Real Estate on November 7, 2024 and sell it today you would lose (700.00) from holding Korea Real Estate or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Korea Real Estate
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Korea Real Estate |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Heungkuk Metaltech and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Korea Real
The main advantage of trading using opposite Heungkuk Metaltech and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Korea Real 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 Real will offset losses from the drop in Korea Real's long position.| Heungkuk Metaltech vs. Barunson Entertainment Arts | Heungkuk Metaltech vs. Seoul Semiconductor Co | Heungkuk Metaltech vs. Next Entertainment World | Heungkuk Metaltech vs. Ssangyong Materials Corp |
| Korea Real vs. Korea Plasma Technology | Korea Real vs. Eagle Veterinary Technology | Korea Real vs. KG Eco Technology | Korea Real vs. Samick Musical Instruments |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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