Correlation Between Heungkuk Metaltech and EyeGene

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Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and EyeGene 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 EyeGene 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 EyeGene, you can compare the effects of market volatilities on Heungkuk Metaltech and EyeGene 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 EyeGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and EyeGene.

Diversification Opportunities for Heungkuk Metaltech and EyeGene

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between Heungkuk and EyeGene is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and EyeGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EyeGene 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 EyeGene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EyeGene has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and EyeGene go up and down completely randomly.

Pair Corralation between Heungkuk Metaltech and EyeGene

Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 0.89 times more return on investment than EyeGene. However, Heungkuk Metaltech CoLtd is 1.12 times less risky than EyeGene. It trades about 0.09 of its potential returns per unit of risk. EyeGene is currently generating about -0.08 per unit of risk. If you would invest  481,500  in Heungkuk Metaltech CoLtd on September 6, 2024 and sell it today you would earn a total of  15,500  from holding Heungkuk Metaltech CoLtd or generate 3.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Heungkuk Metaltech CoLtd  vs.  EyeGene

 Performance 
       Timeline  
Heungkuk Metaltech CoLtd 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Heungkuk Metaltech CoLtd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Heungkuk Metaltech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
EyeGene 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days EyeGene has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Heungkuk Metaltech and EyeGene Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Heungkuk Metaltech and EyeGene

The main advantage of trading using opposite Heungkuk Metaltech and EyeGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, EyeGene 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 EyeGene will offset losses from the drop in EyeGene's long position.
The idea behind Heungkuk Metaltech CoLtd and EyeGene pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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