Correlation Between Choil Aluminum and CU Medical
Can any of the company-specific risk be diversified away by investing in both Choil Aluminum and CU Medical 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 Choil Aluminum and CU Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choil Aluminum and CU Medical Systems, you can compare the effects of market volatilities on Choil Aluminum and CU Medical 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 Choil Aluminum with a short position of CU Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choil Aluminum and CU Medical.
Diversification Opportunities for Choil Aluminum and CU Medical
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Choil and 115480 is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Choil Aluminum and CU Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CU Medical Systems and Choil Aluminum 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 Choil Aluminum are associated (or correlated) with CU Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CU Medical Systems has no effect on the direction of Choil Aluminum i.e., Choil Aluminum and CU Medical go up and down completely randomly.
Pair Corralation between Choil Aluminum and CU Medical
Assuming the 90 days trading horizon Choil Aluminum is expected to generate 1.72 times more return on investment than CU Medical. However, Choil Aluminum is 1.72 times more volatile than CU Medical Systems. It trades about -0.01 of its potential returns per unit of risk. CU Medical Systems is currently generating about -0.08 per unit of risk. If you would invest 225,000 in Choil Aluminum on August 31, 2024 and sell it today you would lose (73,800) from holding Choil Aluminum or give up 32.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choil Aluminum vs. CU Medical Systems
Performance |
| Timeline |
| Choil Aluminum |
| CU Medical Systems |
Choil Aluminum and CU Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choil Aluminum and CU Medical
The main advantage of trading using opposite Choil Aluminum and CU Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choil Aluminum position performs unexpectedly, CU Medical 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 CU Medical will offset losses from the drop in CU Medical's long position.| Choil Aluminum vs. Busan Industrial Co | Choil Aluminum vs. Busan Ind | Choil Aluminum vs. Mirae Asset Daewoo | Choil Aluminum vs. Finebesteel |
| CU Medical vs. AptaBio Therapeutics | CU Medical vs. KT Hitel | CU Medical vs. SillaJen | CU Medical vs. Cytogen |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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