Correlation Between Heungkuk Metaltech and Daesung Hi
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Daesung Hi 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 Daesung Hi 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 Daesung Hi Tech Co, you can compare the effects of market volatilities on Heungkuk Metaltech and Daesung Hi 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 Daesung Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Daesung Hi.
Diversification Opportunities for Heungkuk Metaltech and Daesung Hi
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Heungkuk and Daesung is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Daesung Hi Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Hi Tech 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 Daesung Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Hi Tech has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Daesung Hi go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Daesung Hi
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 0.49 times more return on investment than Daesung Hi. However, Heungkuk Metaltech CoLtd is 2.02 times less risky than Daesung Hi. It trades about 0.02 of its potential returns per unit of risk. Daesung Hi Tech Co is currently generating about -0.07 per unit of risk. If you would invest 506,873 in Heungkuk Metaltech CoLtd on October 14, 2024 and sell it today you would earn a total of 24,127 from holding Heungkuk Metaltech CoLtd or generate 4.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Daesung Hi Tech Co
Performance |
Timeline |
Heungkuk Metaltech CoLtd |
Daesung Hi Tech |
Heungkuk Metaltech and Daesung Hi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Heungkuk Metaltech and Daesung Hi
The main advantage of trading using opposite Heungkuk Metaltech and Daesung Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Daesung Hi 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 Daesung Hi will offset losses from the drop in Daesung Hi's long position.Heungkuk Metaltech vs. Ssangyong Materials Corp | Heungkuk Metaltech vs. LS Materials | Heungkuk Metaltech vs. iNtRON Biotechnology | Heungkuk Metaltech vs. Polaris Office Corp |
Daesung Hi vs. DONGKUK TED METAL | Daesung Hi vs. Eugene Technology CoLtd | Daesung Hi vs. Seers Technology | Daesung Hi vs. iNtRON Biotechnology |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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