Correlation Between JUSUNG ENGINEERING and Korea Environment
Can any of the company-specific risk be diversified away by investing in both JUSUNG ENGINEERING and Korea Environment 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 JUSUNG ENGINEERING and Korea Environment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JUSUNG ENGINEERING Co and Korea Environment Technology, you can compare the effects of market volatilities on JUSUNG ENGINEERING and Korea Environment 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 JUSUNG ENGINEERING with a short position of Korea Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of JUSUNG ENGINEERING and Korea Environment.
Diversification Opportunities for JUSUNG ENGINEERING and Korea Environment
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JUSUNG and Korea is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding JUSUNG ENGINEERING Co and Korea Environment Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Environment and JUSUNG ENGINEERING 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 JUSUNG ENGINEERING Co are associated (or correlated) with Korea Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Environment has no effect on the direction of JUSUNG ENGINEERING i.e., JUSUNG ENGINEERING and Korea Environment go up and down completely randomly.
Pair Corralation between JUSUNG ENGINEERING and Korea Environment
Assuming the 90 days trading horizon JUSUNG ENGINEERING is expected to generate 1.32 times less return on investment than Korea Environment. In addition to that, JUSUNG ENGINEERING is 1.68 times more volatile than Korea Environment Technology. It trades about 0.09 of its total potential returns per unit of risk. Korea Environment Technology is currently generating about 0.2 per unit of volatility. If you would invest 682,155 in Korea Environment Technology on October 14, 2024 and sell it today you would earn a total of 210,845 from holding Korea Environment Technology or generate 30.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JUSUNG ENGINEERING Co vs. Korea Environment Technology
Performance |
| Timeline |
| JUSUNG ENGINEERING |
| Korea Environment |
JUSUNG ENGINEERING and Korea Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JUSUNG ENGINEERING and Korea Environment
The main advantage of trading using opposite JUSUNG ENGINEERING and Korea Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JUSUNG ENGINEERING position performs unexpectedly, Korea Environment 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 Korea Environment will offset losses from the drop in Korea Environment's long position.The idea behind JUSUNG ENGINEERING Co and Korea Environment Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Korea Environment vs. Woori Financial Group | Korea Environment vs. Jb Financial | Korea Environment vs. Nh Investment And | Korea Environment vs. Hyundai Heavy Industries |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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