Correlation Between Heungkuk Metaltech and Next Entertainment
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Next 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 Next 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 Next Entertainment World, you can compare the effects of market volatilities on Heungkuk Metaltech and Next 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 Next Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Next Entertainment.
Diversification Opportunities for Heungkuk Metaltech and Next Entertainment
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Heungkuk and Next is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Next Entertainment World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Entertainment World 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 Next Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Entertainment World has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Next Entertainment go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Next Entertainment
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 0.78 times more return on investment than Next Entertainment. However, Heungkuk Metaltech CoLtd is 1.28 times less risky than Next Entertainment. It trades about 0.07 of its potential returns per unit of risk. Next Entertainment World is currently generating about -0.1 per unit of risk. If you would invest 511,655 in Heungkuk Metaltech CoLtd on October 16, 2024 and sell it today you would earn a total of 11,345 from holding Heungkuk Metaltech CoLtd or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Next Entertainment World
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Next Entertainment World |
Heungkuk Metaltech and Next Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Next Entertainment
The main advantage of trading using opposite Heungkuk Metaltech and Next Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Next 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 Next Entertainment will offset losses from the drop in Next Entertainment's long position.| Heungkuk Metaltech vs. E Investment Development | Heungkuk Metaltech vs. Inzi Display CoLtd | Heungkuk Metaltech vs. LG Chemicals | Heungkuk Metaltech vs. Iljin Display |
| Next Entertainment vs. Youngchang Chemical Co | Next Entertainment vs. Dongnam Chemical Co | Next Entertainment vs. Namhae Chemical | Next Entertainment vs. LG Household Healthcare |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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