Correlation Between Haesung Industrial and Cheryong Industrial
Can any of the company-specific risk be diversified away by investing in both Haesung Industrial and Cheryong 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 Haesung Industrial and Cheryong Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haesung Industrial Co and Cheryong Industrial CoLtd, you can compare the effects of market volatilities on Haesung Industrial and Cheryong 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 Haesung Industrial with a short position of Cheryong Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haesung Industrial and Cheryong Industrial.
Diversification Opportunities for Haesung Industrial and Cheryong Industrial
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haesung and Cheryong is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Haesung Industrial Co and Cheryong Industrial CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheryong Industrial CoLtd and Haesung Industrial 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 Haesung Industrial Co are associated (or correlated) with Cheryong Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheryong Industrial CoLtd has no effect on the direction of Haesung Industrial i.e., Haesung Industrial and Cheryong Industrial go up and down completely randomly.
Pair Corralation between Haesung Industrial and Cheryong Industrial
Assuming the 90 days trading horizon Haesung Industrial Co is expected to generate 0.48 times more return on investment than Cheryong Industrial. However, Haesung Industrial Co is 2.09 times less risky than Cheryong Industrial. It trades about -0.35 of its potential returns per unit of risk. Cheryong Industrial CoLtd is currently generating about -0.27 per unit of risk. If you would invest 671,000 in Haesung Industrial Co on September 3, 2024 and sell it today you would lose (78,000) from holding Haesung Industrial Co or give up 11.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haesung Industrial Co vs. Cheryong Industrial CoLtd
Performance |
| Timeline |
| Haesung Industrial |
| Cheryong Industrial CoLtd |
Haesung Industrial and Cheryong Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haesung Industrial and Cheryong Industrial
The main advantage of trading using opposite Haesung Industrial and Cheryong Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haesung Industrial position performs unexpectedly, Cheryong 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 Cheryong Industrial will offset losses from the drop in Cheryong Industrial's long position.| Haesung Industrial vs. Busan Industrial Co | Haesung Industrial vs. UNISEM Co | Haesung Industrial vs. RPBio Inc | Haesung Industrial vs. Finebesteel |
| Cheryong Industrial vs. SEOJEON ELECTRIC MACHINERY | Cheryong Industrial vs. NH Investment Securities | Cheryong Industrial vs. Keyang Electric Machinery | Cheryong Industrial vs. Atinum Investment 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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