Correlation Between Oriental Precision and Cuckoo Electronics
Can any of the company-specific risk be diversified away by investing in both Oriental Precision and Cuckoo Electronics 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 Oriental Precision and Cuckoo Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oriental Precision Engineering and Cuckoo Electronics Co, you can compare the effects of market volatilities on Oriental Precision and Cuckoo Electronics 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 Oriental Precision with a short position of Cuckoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oriental Precision and Cuckoo Electronics.
Diversification Opportunities for Oriental Precision and Cuckoo Electronics
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oriental and Cuckoo is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Oriental Precision Engineering and Cuckoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuckoo Electronics and Oriental Precision 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 Oriental Precision Engineering are associated (or correlated) with Cuckoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuckoo Electronics has no effect on the direction of Oriental Precision i.e., Oriental Precision and Cuckoo Electronics go up and down completely randomly.
Pair Corralation between Oriental Precision and Cuckoo Electronics
Assuming the 90 days trading horizon Oriental Precision Engineering is expected to under-perform the Cuckoo Electronics. In addition to that, Oriental Precision is 2.63 times more volatile than Cuckoo Electronics Co. It trades about -0.01 of its total potential returns per unit of risk. Cuckoo Electronics Co is currently generating about 0.09 per unit of volatility. If you would invest 2,325,000 in Cuckoo Electronics Co on September 24, 2024 and sell it today you would earn a total of 60,000 from holding Cuckoo Electronics Co or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oriental Precision Engineering vs. Cuckoo Electronics Co
Performance |
| Timeline |
| Oriental Precision |
| Cuckoo Electronics |
Oriental Precision and Cuckoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oriental Precision and Cuckoo Electronics
The main advantage of trading using opposite Oriental Precision and Cuckoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oriental Precision position performs unexpectedly, Cuckoo Electronics 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 Cuckoo Electronics will offset losses from the drop in Cuckoo Electronics' long position.| Oriental Precision vs. KakaoBank Corp | Oriental Precision vs. NICE Information Service | Oriental Precision vs. Korea Information Engineering | Oriental Precision vs. Lotte Data Communication |
| Cuckoo Electronics vs. Woori Technology Investment | Cuckoo Electronics vs. Samsung Card Co | Cuckoo Electronics vs. Korea Real Estate | Cuckoo Electronics vs. CHOROKBAEM PANY Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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