Correlation Between Heungkuk Metaltech and Korea New
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Korea New 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 New 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 New Network, you can compare the effects of market volatilities on Heungkuk Metaltech and Korea New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Korea New.
Diversification Opportunities for Heungkuk Metaltech and Korea New
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Heungkuk and Korea is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Korea New go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Korea New
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to under-perform the Korea New. But the stock apears to be less risky and, when comparing its historical volatility, Heungkuk Metaltech CoLtd is 1.15 times less risky than Korea New. The stock trades about -0.06 of its potential returns per unit of risk. The Korea New Network is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 85,100 in Korea New Network on September 2, 2024 and sell it today you would lose (8,000) from holding Korea New Network or give up 9.4% 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. Korea New Network
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Korea New Network |
Heungkuk Metaltech and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Korea New
The main advantage of trading using opposite Heungkuk Metaltech and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Korea New 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 New will offset losses from the drop in Korea New's long position.| Heungkuk Metaltech vs. Korea New Network | Heungkuk Metaltech vs. ICD Co | Heungkuk Metaltech vs. DYPNF CoLtd | Heungkuk Metaltech vs. Busan Industrial Co |
| Korea New vs. Hanshin Construction Co | Korea New vs. Netmarble Games Corp | Korea New vs. Seohee Construction Co | Korea New vs. Sungdo Engineering Construction |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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