Correlation Between ICD and Geumhwa Plant
Can any of the company-specific risk be diversified away by investing in both ICD and Geumhwa Plant 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 ICD and Geumhwa Plant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICD Co and Geumhwa Plant Service, you can compare the effects of market volatilities on ICD and Geumhwa Plant 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 ICD with a short position of Geumhwa Plant. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICD and Geumhwa Plant.
Diversification Opportunities for ICD and Geumhwa Plant
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ICD and Geumhwa is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding ICD Co and Geumhwa Plant Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geumhwa Plant Service and ICD 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 ICD Co are associated (or correlated) with Geumhwa Plant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geumhwa Plant Service has no effect on the direction of ICD i.e., ICD and Geumhwa Plant go up and down completely randomly.
Pair Corralation between ICD and Geumhwa Plant
Assuming the 90 days trading horizon ICD Co is expected to under-perform the Geumhwa Plant. In addition to that, ICD is 2.47 times more volatile than Geumhwa Plant Service. It trades about -0.03 of its total potential returns per unit of risk. Geumhwa Plant Service is currently generating about 0.0 per unit of volatility. If you would invest 2,617,315 in Geumhwa Plant Service on September 3, 2024 and sell it today you would lose (77,315) from holding Geumhwa Plant Service or give up 2.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICD Co vs. Geumhwa Plant Service
Performance |
| Timeline |
| ICD Co |
| Geumhwa Plant Service |
ICD and Geumhwa Plant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICD and Geumhwa Plant
The main advantage of trading using opposite ICD and Geumhwa Plant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICD position performs unexpectedly, Geumhwa Plant 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 Geumhwa Plant will offset losses from the drop in Geumhwa Plant's long position.| ICD vs. SFA Engineering | ICD vs. APS Holdings | ICD vs. Soulbrain Holdings Co | ICD vs. JUSUNG ENGINEERING Co |
| Geumhwa Plant vs. LG Display | Geumhwa Plant vs. Hyundai Motor | Geumhwa Plant vs. Hyundai Motor Co | Geumhwa Plant vs. Hyundai Motor 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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