Correlation Between Osang Healthcare and Microfriend
Can any of the company-specific risk be diversified away by investing in both Osang Healthcare and Microfriend 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 Osang Healthcare and Microfriend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Osang Healthcare Co,Ltd and Microfriend, you can compare the effects of market volatilities on Osang Healthcare and Microfriend 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 Osang Healthcare with a short position of Microfriend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osang Healthcare and Microfriend.
Diversification Opportunities for Osang Healthcare and Microfriend
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Osang and Microfriend is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Osang Healthcare Co,Ltd and Microfriend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microfriend and Osang Healthcare 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 Osang Healthcare Co,Ltd are associated (or correlated) with Microfriend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microfriend has no effect on the direction of Osang Healthcare i.e., Osang Healthcare and Microfriend go up and down completely randomly.
Pair Corralation between Osang Healthcare and Microfriend
Assuming the 90 days trading horizon Osang Healthcare Co,Ltd is expected to under-perform the Microfriend. In addition to that, Osang Healthcare is 1.12 times more volatile than Microfriend. It trades about -0.07 of its total potential returns per unit of risk. Microfriend is currently generating about -0.01 per unit of volatility. If you would invest 512,000 in Microfriend on October 13, 2024 and sell it today you would lose (206,000) from holding Microfriend or give up 40.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 42.41% |
| Values | Daily Returns |
Osang Healthcare Co,Ltd vs. Microfriend
Performance |
| Timeline |
| Osang Healthcare Co,Ltd |
| Microfriend |
Osang Healthcare and Microfriend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Osang Healthcare and Microfriend
The main advantage of trading using opposite Osang Healthcare and Microfriend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osang Healthcare position performs unexpectedly, Microfriend 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 Microfriend will offset losses from the drop in Microfriend's long position.| Osang Healthcare vs. GS Retail Co | Osang Healthcare vs. LG Household Healthcare | Osang Healthcare vs. Daishin Information Communications | Osang Healthcare vs. CKH Food Health |
| Microfriend vs. Samsung Publishing Co | Microfriend vs. InfoBank | Microfriend vs. BGF Retail Co | Microfriend vs. Osang Healthcare Co,Ltd |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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