Correlation Between Korea Environment and JUSUNG ENGINEERING
Can any of the company-specific risk be diversified away by investing in both Korea Environment and JUSUNG ENGINEERING 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 Korea Environment and JUSUNG ENGINEERING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Environment Technology and JUSUNG ENGINEERING Co, you can compare the effects of market volatilities on Korea Environment and JUSUNG ENGINEERING 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 Korea Environment with a short position of JUSUNG ENGINEERING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Environment and JUSUNG ENGINEERING.
Diversification Opportunities for Korea Environment and JUSUNG ENGINEERING
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Korea and JUSUNG is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Korea Environment Technology and JUSUNG ENGINEERING Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JUSUNG ENGINEERING and Korea Environment 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 Korea Environment Technology are associated (or correlated) with JUSUNG ENGINEERING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JUSUNG ENGINEERING has no effect on the direction of Korea Environment i.e., Korea Environment and JUSUNG ENGINEERING go up and down completely randomly.
Pair Corralation between Korea Environment and JUSUNG ENGINEERING
Assuming the 90 days trading horizon Korea Environment Technology is expected to generate 0.35 times more return on investment than JUSUNG ENGINEERING. However, Korea Environment Technology is 2.82 times less risky than JUSUNG ENGINEERING. It trades about 0.09 of its potential returns per unit of risk. JUSUNG ENGINEERING Co is currently generating about 0.03 per unit of risk. If you would invest 654,975 in Korea Environment Technology on September 26, 2024 and sell it today you would earn a total of 247,025 from holding Korea Environment Technology or generate 37.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Environment Technology vs. JUSUNG ENGINEERING Co
Performance |
| Timeline |
| Korea Environment |
| JUSUNG ENGINEERING |
Korea Environment and JUSUNG ENGINEERING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Environment and JUSUNG ENGINEERING
The main advantage of trading using opposite Korea Environment and JUSUNG ENGINEERING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Environment position performs unexpectedly, JUSUNG ENGINEERING 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 JUSUNG ENGINEERING will offset losses from the drop in JUSUNG ENGINEERING's long position.| Korea Environment vs. Busan Industrial Co | Korea Environment vs. Busan Ind | Korea Environment vs. Mirae Asset Daewoo | Korea Environment vs. Shinhan WTI Futures |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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