Correlation Between Mobase Electronics and System
Can any of the company-specific risk be diversified away by investing in both Mobase Electronics and System 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 Mobase Electronics and System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobase Electronics CoLtd and System and Application, you can compare the effects of market volatilities on Mobase Electronics and System 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 Mobase Electronics with a short position of System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobase Electronics and System.
Diversification Opportunities for Mobase Electronics and System
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mobase and System is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mobase Electronics CoLtd and System and Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System and Application and Mobase Electronics 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 Mobase Electronics CoLtd are associated (or correlated) with System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System and Application has no effect on the direction of Mobase Electronics i.e., Mobase Electronics and System go up and down completely randomly.
Pair Corralation between Mobase Electronics and System
Assuming the 90 days trading horizon Mobase Electronics CoLtd is expected to generate 1.21 times more return on investment than System. However, Mobase Electronics is 1.21 times more volatile than System and Application. It trades about 0.03 of its potential returns per unit of risk. System and Application is currently generating about -0.02 per unit of risk. If you would invest 133,286 in Mobase Electronics CoLtd on September 3, 2024 and sell it today you would earn a total of 24,114 from holding Mobase Electronics CoLtd or generate 18.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobase Electronics CoLtd vs. System and Application
Performance |
| Timeline |
| Mobase Electronics CoLtd |
| System and Application |
Mobase Electronics and System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobase Electronics and System
The main advantage of trading using opposite Mobase Electronics and System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobase Electronics position performs unexpectedly, System 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 System will offset losses from the drop in System's long position.| Mobase Electronics vs. Korea Real Estate | Mobase Electronics vs. Busan Industrial Co | Mobase Electronics vs. UNISEM Co | Mobase Electronics vs. RPBio Inc |
| System vs. Dongsin Engineering Construction | System vs. Doosan Fuel Cell | System vs. Daishin Balance 1 | System vs. Total Soft Bank |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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