Correlation Between MEDIANA CoLtd and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both MEDIANA CoLtd 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 MEDIANA CoLtd and Heungkuk Metaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDIANA CoLtd and Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on MEDIANA CoLtd 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 MEDIANA CoLtd with a short position of Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDIANA CoLtd and Heungkuk Metaltech.
Diversification Opportunities for MEDIANA CoLtd and Heungkuk Metaltech
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MEDIANA and Heungkuk is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding MEDIANA CoLtd 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 MEDIANA CoLtd 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 MEDIANA CoLtd 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 MEDIANA CoLtd i.e., MEDIANA CoLtd and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between MEDIANA CoLtd and Heungkuk Metaltech
Assuming the 90 days trading horizon MEDIANA CoLtd is expected to generate 3.15 times more return on investment than Heungkuk Metaltech. However, MEDIANA CoLtd is 3.15 times more volatile than Heungkuk Metaltech CoLtd. It trades about 0.08 of its potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about -0.05 per unit of risk. If you would invest 464,000 in MEDIANA CoLtd on August 30, 2024 and sell it today you would earn a total of 26,000 from holding MEDIANA CoLtd or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDIANA CoLtd vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| MEDIANA CoLtd |
| Heungkuk Metaltech CoLtd |
MEDIANA CoLtd and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDIANA CoLtd and Heungkuk Metaltech
The main advantage of trading using opposite MEDIANA CoLtd and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDIANA CoLtd 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.| MEDIANA CoLtd vs. Samsung Electronics Co | MEDIANA CoLtd vs. Samsung Electronics Co | MEDIANA CoLtd vs. LG Energy Solution | MEDIANA CoLtd vs. SK Hynix |
| Heungkuk Metaltech vs. Samsung Electronics Co | Heungkuk Metaltech vs. Samsung Electronics Co | Heungkuk Metaltech vs. KB Financial Group | Heungkuk Metaltech vs. Shinhan Financial Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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