Correlation Between Neungyule Education and GS Engineering
Can any of the company-specific risk be diversified away by investing in both Neungyule Education and GS Engineering 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 Neungyule Education and GS Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neungyule Education and GS Engineering Construction, you can compare the effects of market volatilities on Neungyule Education and GS Engineering 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 Neungyule Education with a short position of GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neungyule Education and GS Engineering.
Diversification Opportunities for Neungyule Education and GS Engineering
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Neungyule and 006360 is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Neungyule Education and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const and Neungyule Education 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 Neungyule Education are associated (or correlated) with GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of Neungyule Education i.e., Neungyule Education and GS Engineering go up and down completely randomly.
Pair Corralation between Neungyule Education and GS Engineering
Assuming the 90 days trading horizon Neungyule Education is expected to generate 1.72 times more return on investment than GS Engineering. However, Neungyule Education is 1.72 times more volatile than GS Engineering Construction. It trades about 0.04 of its potential returns per unit of risk. GS Engineering Construction is currently generating about -0.1 per unit of risk. If you would invest 389,500 in Neungyule Education on November 6, 2024 and sell it today you would earn a total of 4,500 from holding Neungyule Education or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neungyule Education vs. GS Engineering Construction
Performance |
| Timeline |
| Neungyule Education |
| GS Engineering Const |
Neungyule Education and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neungyule Education and GS Engineering
The main advantage of trading using opposite Neungyule Education and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neungyule Education position performs unexpectedly, GS Engineering 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 GS Engineering will offset losses from the drop in GS Engineering's long position.| Neungyule Education vs. Dongil Metal Co | Neungyule Education vs. Ssangyong Information Communication | Neungyule Education vs. Songwon Industrial Co | Neungyule Education vs. Lotte Data Communication |
| GS Engineering vs. Dongil Metal Co | GS Engineering vs. Atinum Investment Co | GS Engineering vs. Woori Technology Investment | GS Engineering vs. PJ Metal 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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