Correlation Between Heungkuk Metaltech and Daishin Balance
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and Daishin Balance 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 Daishin Balance 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 Daishin Balance No, you can compare the effects of market volatilities on Heungkuk Metaltech and Daishin Balance 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 Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Daishin Balance.
Diversification Opportunities for Heungkuk Metaltech and Daishin Balance
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Heungkuk and Daishin is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Daishin Balance No in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Balance No 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 Daishin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Balance No has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and Daishin Balance go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Daishin Balance
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 0.87 times more return on investment than Daishin Balance. However, Heungkuk Metaltech CoLtd is 1.14 times less risky than Daishin Balance. It trades about 0.18 of its potential returns per unit of risk. Daishin Balance No is currently generating about -0.09 per unit of risk. If you would invest 479,000 in Heungkuk Metaltech CoLtd on September 13, 2024 and sell it today you would earn a total of 61,000 from holding Heungkuk Metaltech CoLtd or generate 12.73% 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. Daishin Balance No
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Daishin Balance No |
Heungkuk Metaltech and Daishin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Daishin Balance
The main advantage of trading using opposite Heungkuk Metaltech and Daishin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, Daishin Balance 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 Daishin Balance will offset losses from the drop in Daishin Balance's long position.| Heungkuk Metaltech vs. Korea New Network | Heungkuk Metaltech vs. Solution Advanced Technology | Heungkuk Metaltech vs. Busan Industrial Co | Heungkuk Metaltech vs. Busan Ind |
| Daishin Balance vs. Korean Reinsurance Co | Daishin Balance vs. CU Tech Corp | Daishin Balance vs. Digital Power Communications | Daishin Balance vs. Lotte Non Life Insurance |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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