Correlation Between Korea Real and Hwaseung Industries
Can any of the company-specific risk be diversified away by investing in both Korea Real 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 Korea Real and Hwaseung Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Real Estate and Hwaseung Industries Co, you can compare the effects of market volatilities on Korea Real 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 Korea Real with a short position of Hwaseung Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Hwaseung Industries.
Diversification Opportunities for Korea Real and Hwaseung Industries
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Korea and Hwaseung is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Hwaseung Industries Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwaseung Industries and Korea Real 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 Real Estate 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 Korea Real i.e., Korea Real and Hwaseung Industries go up and down completely randomly.
Pair Corralation between Korea Real and Hwaseung Industries
If you would invest 100,600 in Korea Real Estate on September 9, 2024 and sell it today you would lose (100.00) from holding Korea Real Estate or give up 0.1% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Korea Real Estate vs. Hwaseung Industries Co
Performance |
Timeline |
Korea Real Estate |
Hwaseung Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Korea Real and Hwaseung Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Korea Real and Hwaseung Industries
The main advantage of trading using opposite Korea Real and Hwaseung Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real 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.Korea Real vs. Tway Air Co | Korea Real vs. CJ Seafood Corp | Korea Real vs. Sempio Foods Co | Korea Real vs. Haitai Confectionery Foods |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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