Correlation Between Union Materials and Pyung Hwa
Can any of the company-specific risk be diversified away by investing in both Union Materials and Pyung Hwa 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 Union Materials and Pyung Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Materials Corp and Pyung Hwa Industrial, you can compare the effects of market volatilities on Union Materials and Pyung Hwa 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 Union Materials with a short position of Pyung Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Materials and Pyung Hwa.
Diversification Opportunities for Union Materials and Pyung Hwa
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Union and Pyung is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Union Materials Corp and Pyung Hwa Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyung Hwa Industrial and Union Materials 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 Union Materials Corp are associated (or correlated) with Pyung Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyung Hwa Industrial has no effect on the direction of Union Materials i.e., Union Materials and Pyung Hwa go up and down completely randomly.
Pair Corralation between Union Materials and Pyung Hwa
Assuming the 90 days trading horizon Union Materials Corp is expected to under-perform the Pyung Hwa. In addition to that, Union Materials is 1.01 times more volatile than Pyung Hwa Industrial. It trades about -0.03 of its total potential returns per unit of risk. Pyung Hwa Industrial is currently generating about 0.0 per unit of volatility. If you would invest 130,800 in Pyung Hwa Industrial on November 9, 2024 and sell it today you would lose (15,200) from holding Pyung Hwa Industrial or give up 11.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Materials Corp vs. Pyung Hwa Industrial
Performance |
| Timeline |
| Union Materials Corp |
| Pyung Hwa Industrial |
Union Materials and Pyung Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Materials and Pyung Hwa
The main advantage of trading using opposite Union Materials and Pyung Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Materials position performs unexpectedly, Pyung Hwa 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 Pyung Hwa will offset losses from the drop in Pyung Hwa's long position.| Union Materials vs. Cube Entertainment | Union Materials vs. Dreamus Company | Union Materials vs. LG Energy Solution | Union Materials vs. Dongwon System |
| Pyung Hwa vs. JYP Entertainment Corp | Pyung Hwa vs. Next Entertainment World | Pyung Hwa vs. Han Kook Steel | Pyung Hwa vs. BooKook Steel 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 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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