Correlation Between Sungdo Engineering and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both Sungdo Engineering and Heungkuk Metaltech 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 Sungdo Engineering and Heungkuk Metaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungdo Engineering Construction and Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on Sungdo Engineering and Heungkuk Metaltech 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 Sungdo Engineering with a short position of Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungdo Engineering and Heungkuk Metaltech.
Diversification Opportunities for Sungdo Engineering and Heungkuk Metaltech
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sungdo and Heungkuk is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sungdo Engineering Constructio and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd and Sungdo 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 Sungdo Engineering Construction are associated (or correlated) with Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of Sungdo Engineering i.e., Sungdo Engineering and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between Sungdo Engineering and Heungkuk Metaltech
Assuming the 90 days trading horizon Sungdo Engineering Construction is expected to under-perform the Heungkuk Metaltech. In addition to that, Sungdo Engineering is 1.39 times more volatile than Heungkuk Metaltech CoLtd. It trades about -0.53 of its total potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about -0.16 per unit of volatility. If you would invest 540,000 in Heungkuk Metaltech CoLtd on November 3, 2024 and sell it today you would lose (21,000) from holding Heungkuk Metaltech CoLtd or give up 3.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungdo Engineering Constructio vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| Sungdo Engineering |
| Heungkuk Metaltech CoLtd |
Sungdo Engineering and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungdo Engineering and Heungkuk Metaltech
The main advantage of trading using opposite Sungdo Engineering and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungdo Engineering position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.| Sungdo Engineering vs. Sewoon Medical Co | Sungdo Engineering vs. Hanmi Semiconductor Co | Sungdo Engineering vs. Display Tech Co | Sungdo Engineering vs. Automobile Pc |
| Heungkuk Metaltech vs. Hanwha Life Insurance | Heungkuk Metaltech vs. Dongbang Transport Logistics | Heungkuk Metaltech vs. Haitai Confectionery Foods | Heungkuk Metaltech vs. CJ Seafood Corp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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