Correlation Between Insung Information and Hwaseung Industries
Can any of the company-specific risk be diversified away by investing in both Insung Information and Hwaseung Industries 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 Insung Information and Hwaseung Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insung Information Co and Hwaseung Industries Co, you can compare the effects of market volatilities on Insung Information and Hwaseung Industries 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 Insung Information with a short position of Hwaseung Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insung Information and Hwaseung Industries.
Diversification Opportunities for Insung Information and Hwaseung Industries
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Insung and Hwaseung is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Insung Information Co and Hwaseung Industries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwaseung Industries and Insung Information 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 Insung Information Co are associated (or correlated) with Hwaseung Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwaseung Industries has no effect on the direction of Insung Information i.e., Insung Information and Hwaseung Industries go up and down completely randomly.
Pair Corralation between Insung Information and Hwaseung Industries
Assuming the 90 days trading horizon Insung Information Co is expected to generate 3.01 times more return on investment than Hwaseung Industries. However, Insung Information is 3.01 times more volatile than Hwaseung Industries Co. It trades about 0.02 of its potential returns per unit of risk. Hwaseung Industries Co is currently generating about 0.03 per unit of risk. If you would invest 201,460 in Insung Information Co on September 12, 2024 and sell it today you would lose (27,260) from holding Insung Information Co or give up 13.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Insung Information Co vs. Hwaseung Industries Co
Performance |
| Timeline |
| Insung Information |
| Hwaseung Industries |
Insung Information and Hwaseung Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insung Information and Hwaseung Industries
The main advantage of trading using opposite Insung Information and Hwaseung Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insung Information position performs unexpectedly, Hwaseung Industries 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 Hwaseung Industries will offset losses from the drop in Hwaseung Industries' long position.| Insung Information vs. Pungguk Ethanol Industrial | Insung Information vs. Haesung Industrial Co | Insung Information vs. Cheryong Industrial CoLtd | Insung Information vs. LEENO Industrial |
| Hwaseung Industries vs. Innowireless Co | Hwaseung Industries vs. Insung Information Co | Hwaseung Industries vs. Nice Information Telecommunication | Hwaseung Industries vs. BGF Retail 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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