Correlation Between Heungkuk Metaltech and Dongwoo Farm
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Dongwoo Farm 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 Dongwoo Farm 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 Dongwoo Farm To, you can compare the effects of market volatilities on Heungkuk Metaltech and Dongwoo Farm 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 Dongwoo Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Dongwoo Farm.
Diversification Opportunities for Heungkuk Metaltech and Dongwoo Farm
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Heungkuk and Dongwoo is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Dongwoo Farm To in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoo Farm To 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 Dongwoo Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoo Farm To has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Dongwoo Farm go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Dongwoo Farm
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 2.14 times more return on investment than Dongwoo Farm. However, Heungkuk Metaltech is 2.14 times more volatile than Dongwoo Farm To. It trades about 0.12 of its potential returns per unit of risk. Dongwoo Farm To is currently generating about 0.08 per unit of risk. If you would invest 460,967 in Heungkuk Metaltech CoLtd on October 26, 2024 and sell it today you would earn a total of 54,033 from holding Heungkuk Metaltech CoLtd or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Dongwoo Farm To
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Dongwoo Farm To |
Heungkuk Metaltech and Dongwoo Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Dongwoo Farm
The main advantage of trading using opposite Heungkuk Metaltech and Dongwoo Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Dongwoo Farm 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 Dongwoo Farm will offset losses from the drop in Dongwoo Farm's long position.| Heungkuk Metaltech vs. Samsung Electronics Co | Heungkuk Metaltech vs. Samsung Electronics Co | Heungkuk Metaltech vs. KB Financial Group | Heungkuk Metaltech vs. Shinhan Financial Group |
| Dongwoo Farm vs. Shinhan Financial Group | Dongwoo Farm vs. Heungkuk Metaltech CoLtd | Dongwoo Farm vs. Samsung Life Insurance | Dongwoo Farm vs. Jeju Bank |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |