Correlation Between Pungguk Ethanol and Cho Bi
Can any of the company-specific risk be diversified away by investing in both Pungguk Ethanol and Cho Bi 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 Pungguk Ethanol and Cho Bi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pungguk Ethanol Industrial and Cho Bi Co, you can compare the effects of market volatilities on Pungguk Ethanol and Cho Bi 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 Pungguk Ethanol with a short position of Cho Bi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pungguk Ethanol and Cho Bi.
Diversification Opportunities for Pungguk Ethanol and Cho Bi
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pungguk and Cho is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Pungguk Ethanol Industrial and Cho Bi Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cho Bi and Pungguk Ethanol 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 Pungguk Ethanol Industrial are associated (or correlated) with Cho Bi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cho Bi has no effect on the direction of Pungguk Ethanol i.e., Pungguk Ethanol and Cho Bi go up and down completely randomly.
Pair Corralation between Pungguk Ethanol and Cho Bi
Assuming the 90 days trading horizon Pungguk Ethanol Industrial is expected to under-perform the Cho Bi. But the stock apears to be less risky and, when comparing its historical volatility, Pungguk Ethanol Industrial is 3.89 times less risky than Cho Bi. The stock trades about -0.27 of its potential returns per unit of risk. The Cho Bi Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,015,000 in Cho Bi Co on September 4, 2024 and sell it today you would lose (9,000) from holding Cho Bi Co or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pungguk Ethanol Industrial vs. Cho Bi Co
Performance |
| Timeline |
| Pungguk Ethanol Indu |
| Cho Bi |
Pungguk Ethanol and Cho Bi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pungguk Ethanol and Cho Bi
The main advantage of trading using opposite Pungguk Ethanol and Cho Bi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pungguk Ethanol position performs unexpectedly, Cho Bi 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 Cho Bi will offset losses from the drop in Cho Bi's long position.| Pungguk Ethanol vs. Tae Kyung Chemical | Pungguk Ethanol vs. Kukdong Oil Chemicals | Pungguk Ethanol vs. Miwon Chemical | Pungguk Ethanol vs. Daehan Synthetic Fiber |
| Cho Bi vs. Seoul Electronics Telecom | Cho Bi vs. Nable Communications | Cho Bi vs. Pungguk Ethanol Industrial | Cho Bi vs. Lotte Data Communication |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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