Correlation Between JUSUNG ENGINEERING and EO Technics
Can any of the company-specific risk be diversified away by investing in both JUSUNG ENGINEERING and EO Technics 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 EO Technics 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 EO Technics Co, you can compare the effects of market volatilities on JUSUNG ENGINEERING and EO Technics 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 EO Technics. Check out your portfolio center. Please also check ongoing floating volatility patterns of JUSUNG ENGINEERING and EO Technics.
Diversification Opportunities for JUSUNG ENGINEERING and EO Technics
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JUSUNG and 039030 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding JUSUNG ENGINEERING Co and EO Technics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EO Technics 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 EO Technics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EO Technics has no effect on the direction of JUSUNG ENGINEERING i.e., JUSUNG ENGINEERING and EO Technics go up and down completely randomly.
Pair Corralation between JUSUNG ENGINEERING and EO Technics
Assuming the 90 days trading horizon JUSUNG ENGINEERING Co is expected to generate 1.13 times more return on investment than EO Technics. However, JUSUNG ENGINEERING is 1.13 times more volatile than EO Technics Co. It trades about 0.1 of its potential returns per unit of risk. EO Technics Co is currently generating about -0.3 per unit of risk. If you would invest 2,705,000 in JUSUNG ENGINEERING Co on August 25, 2024 and sell it today you would earn a total of 215,000 from holding JUSUNG ENGINEERING Co or generate 7.95% 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. EO Technics Co
Performance |
| Timeline |
| JUSUNG ENGINEERING |
| EO Technics |
JUSUNG ENGINEERING and EO Technics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JUSUNG ENGINEERING and EO Technics
The main advantage of trading using opposite JUSUNG ENGINEERING and EO Technics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JUSUNG ENGINEERING position performs unexpectedly, EO Technics 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 EO Technics will offset losses from the drop in EO Technics' long position.| JUSUNG ENGINEERING vs. Korea Real Estate | JUSUNG ENGINEERING vs. Korea Ratings Co | JUSUNG ENGINEERING vs. IQuest Co | JUSUNG ENGINEERING vs. Wonbang Tech Co |
| EO Technics vs. Korea Real Estate | EO Technics vs. Korea Ratings Co | EO Technics vs. IQuest Co | EO Technics vs. Wonbang Tech 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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