Correlation Between Guyoung Technology and Samhwa Paint
Can any of the company-specific risk be diversified away by investing in both Guyoung Technology and Samhwa Paint 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 Guyoung Technology and Samhwa Paint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guyoung Technology Co and Samhwa Paint Industrial, you can compare the effects of market volatilities on Guyoung Technology and Samhwa Paint 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 Guyoung Technology with a short position of Samhwa Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guyoung Technology and Samhwa Paint.
Diversification Opportunities for Guyoung Technology and Samhwa Paint
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guyoung and Samhwa is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Guyoung Technology Co and Samhwa Paint Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhwa Paint Industrial and Guyoung Technology 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 Guyoung Technology Co are associated (or correlated) with Samhwa Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhwa Paint Industrial has no effect on the direction of Guyoung Technology i.e., Guyoung Technology and Samhwa Paint go up and down completely randomly.
Pair Corralation between Guyoung Technology and Samhwa Paint
Assuming the 90 days trading horizon Guyoung Technology Co is expected to generate 0.73 times more return on investment than Samhwa Paint. However, Guyoung Technology Co is 1.36 times less risky than Samhwa Paint. It trades about -0.15 of its potential returns per unit of risk. Samhwa Paint Industrial is currently generating about -0.2 per unit of risk. If you would invest 222,500 in Guyoung Technology Co on August 29, 2024 and sell it today you would lose (11,500) from holding Guyoung Technology Co or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guyoung Technology Co vs. Samhwa Paint Industrial
Performance |
| Timeline |
| Guyoung Technology |
| Samhwa Paint Industrial |
Guyoung Technology and Samhwa Paint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guyoung Technology and Samhwa Paint
The main advantage of trading using opposite Guyoung Technology and Samhwa Paint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guyoung Technology position performs unexpectedly, Samhwa Paint 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 Samhwa Paint will offset losses from the drop in Samhwa Paint's long position.| Guyoung Technology vs. Busan Industrial Co | Guyoung Technology vs. Busan Ind | Guyoung Technology vs. Mirae Asset Daewoo | Guyoung Technology vs. UNISEM Co |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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