Correlation Between Guyoung Technology and Formetal
Can any of the company-specific risk be diversified away by investing in both Guyoung Technology and Formetal 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 Formetal 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 Formetal Co, you can compare the effects of market volatilities on Guyoung Technology and Formetal 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 Formetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guyoung Technology and Formetal.
Diversification Opportunities for Guyoung Technology and Formetal
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guyoung and Formetal is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Guyoung Technology Co and Formetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formetal 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 Formetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formetal has no effect on the direction of Guyoung Technology i.e., Guyoung Technology and Formetal go up and down completely randomly.
Pair Corralation between Guyoung Technology and Formetal
Assuming the 90 days trading horizon Guyoung Technology Co is expected to generate 0.62 times more return on investment than Formetal. However, Guyoung Technology Co is 1.6 times less risky than Formetal. It trades about 0.12 of its potential returns per unit of risk. Formetal Co is currently generating about 0.0 per unit of risk. If you would invest 220,500 in Guyoung Technology Co on November 18, 2024 and sell it today you would earn a total of 13,500 from holding Guyoung Technology Co or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guyoung Technology Co vs. Formetal Co
Performance |
| Timeline |
| Guyoung Technology |
| Formetal |
Guyoung Technology and Formetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guyoung Technology and Formetal
The main advantage of trading using opposite Guyoung Technology and Formetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guyoung Technology position performs unexpectedly, Formetal 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 Formetal will offset losses from the drop in Formetal's long position.| Guyoung Technology vs. GS Retail Co | Guyoung Technology vs. Songwon Industrial Co | Guyoung Technology vs. Lee Ku Industrial | Guyoung Technology vs. DRB Industrial Co |
| Formetal vs. Rainbow Robotics | Formetal vs. COWINTECH Co | Formetal vs. Seoam Machinery Industry | Formetal vs. Busan Industrial 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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