Correlation Between Heungkuk Metaltech and YG Entertainment
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and YG Entertainment 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 YG Entertainment 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 YG Entertainment, you can compare the effects of market volatilities on Heungkuk Metaltech and YG Entertainment 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 YG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and YG Entertainment.
Diversification Opportunities for Heungkuk Metaltech and YG Entertainment
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Heungkuk and 122870 is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and YG Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YG Entertainment 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 YG Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YG Entertainment has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and YG Entertainment go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and YG Entertainment
Assuming the 90 days trading horizon Heungkuk Metaltech is expected to generate 16.12 times less return on investment than YG Entertainment. But when comparing it to its historical volatility, Heungkuk Metaltech CoLtd is 1.87 times less risky than YG Entertainment. It trades about 0.0 of its potential returns per unit of risk. YG Entertainment is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,069,308 in YG Entertainment on October 14, 2024 and sell it today you would lose (444,308) from holding YG Entertainment or give up 8.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. YG Entertainment
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| YG Entertainment |
Heungkuk Metaltech and YG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and YG Entertainment
The main advantage of trading using opposite Heungkuk Metaltech and YG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, YG Entertainment 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 YG Entertainment will offset losses from the drop in YG Entertainment's long position.| Heungkuk Metaltech vs. Mirai Semiconductors Co | Heungkuk Metaltech vs. LG Household Healthcare | Heungkuk Metaltech vs. BIT Computer Co | Heungkuk Metaltech vs. Air Busan Co |
| YG Entertainment vs. Ssangyong Information Communication | YG Entertainment vs. ECSTELECOM Co | YG Entertainment vs. Lotte Chilsung Beverage | YG Entertainment vs. Heungkuk Metaltech CoLtd |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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