Correlation Between Pungguk Ethanol and Eagon Industrial
Can any of the company-specific risk be diversified away by investing in both Pungguk Ethanol and Eagon Industrial 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 Eagon Industrial 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 Eagon Industrial Co, you can compare the effects of market volatilities on Pungguk Ethanol and Eagon Industrial 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 Eagon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pungguk Ethanol and Eagon Industrial.
Diversification Opportunities for Pungguk Ethanol and Eagon Industrial
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pungguk and Eagon is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Pungguk Ethanol Industrial and Eagon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagon Industrial 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 Eagon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagon Industrial has no effect on the direction of Pungguk Ethanol i.e., Pungguk Ethanol and Eagon Industrial go up and down completely randomly.
Pair Corralation between Pungguk Ethanol and Eagon Industrial
Assuming the 90 days trading horizon Pungguk Ethanol Industrial is expected to under-perform the Eagon Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Pungguk Ethanol Industrial is 1.21 times less risky than Eagon Industrial. The stock trades about -0.27 of its potential returns per unit of risk. The Eagon Industrial Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 502,000 in Eagon Industrial Co on September 4, 2024 and sell it today you would lose (5,000) from holding Eagon Industrial Co or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pungguk Ethanol Industrial vs. Eagon Industrial Co
Performance |
| Timeline |
| Pungguk Ethanol Indu |
| Eagon Industrial |
Pungguk Ethanol and Eagon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pungguk Ethanol and Eagon Industrial
The main advantage of trading using opposite Pungguk Ethanol and Eagon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pungguk Ethanol position performs unexpectedly, Eagon Industrial 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 Eagon Industrial will offset losses from the drop in Eagon Industrial'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 |
| Eagon Industrial vs. Dongbu Insurance Co | Eagon Industrial vs. BNK Financial Group | Eagon Industrial vs. Korean Reinsurance Co | Eagon Industrial vs. Daewoo Engineering Construction |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |