Correlation Between Heungkuk Metaltech and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Dongil Metal 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 Dongil Metal 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 Dongil Metal Co, you can compare the effects of market volatilities on Heungkuk Metaltech and Dongil Metal 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 Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Dongil Metal.
Diversification Opportunities for Heungkuk Metaltech and Dongil Metal
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Heungkuk and Dongil is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Metal 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 Dongil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Metal has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Dongil Metal go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Dongil Metal
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to under-perform the Dongil Metal. But the stock apears to be less risky and, when comparing its historical volatility, Heungkuk Metaltech CoLtd is 1.65 times less risky than Dongil Metal. The stock trades about -0.09 of its potential returns per unit of risk. The Dongil Metal Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 817,000 in Dongil Metal Co on November 7, 2024 and sell it today you would earn a total of 18,000 from holding Dongil Metal Co or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Dongil Metal Co
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Dongil Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Heungkuk Metaltech and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Dongil Metal
The main advantage of trading using opposite Heungkuk Metaltech and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Dongil Metal 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 Dongil Metal will offset losses from the drop in Dongil Metal'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 |
| Dongil Metal vs. Tamul Multimedia Co | Dongil Metal vs. T3 Entertainment Co | Dongil Metal vs. Shinhan Financial Group | Dongil Metal vs. Korea Information Communications |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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