Correlation Between INSUN Environmental and ECSTELECOM
Can any of the company-specific risk be diversified away by investing in both INSUN Environmental and ECSTELECOM 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 INSUN Environmental and ECSTELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSUN Environmental New and ECSTELECOM Co, you can compare the effects of market volatilities on INSUN Environmental and ECSTELECOM 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 INSUN Environmental with a short position of ECSTELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSUN Environmental and ECSTELECOM.
Diversification Opportunities for INSUN Environmental and ECSTELECOM
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INSUN and ECSTELECOM is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding INSUN Environmental New and ECSTELECOM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECSTELECOM and INSUN Environmental 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 INSUN Environmental New are associated (or correlated) with ECSTELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECSTELECOM has no effect on the direction of INSUN Environmental i.e., INSUN Environmental and ECSTELECOM go up and down completely randomly.
Pair Corralation between INSUN Environmental and ECSTELECOM
Assuming the 90 days trading horizon INSUN Environmental New is expected to under-perform the ECSTELECOM. In addition to that, INSUN Environmental is 1.06 times more volatile than ECSTELECOM Co. It trades about -0.05 of its total potential returns per unit of risk. ECSTELECOM Co is currently generating about 0.02 per unit of volatility. If you would invest 289,276 in ECSTELECOM Co on October 16, 2024 and sell it today you would earn a total of 21,224 from holding ECSTELECOM Co or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSUN Environmental New vs. ECSTELECOM Co
Performance |
| Timeline |
| INSUN Environmental New |
| ECSTELECOM |
INSUN Environmental and ECSTELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSUN Environmental and ECSTELECOM
The main advantage of trading using opposite INSUN Environmental and ECSTELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSUN Environmental position performs unexpectedly, ECSTELECOM 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 ECSTELECOM will offset losses from the drop in ECSTELECOM's long position.| INSUN Environmental vs. Korea Environment Technology | INSUN Environmental vs. Paradise Co | INSUN Environmental vs. Seoul Semiconductor Co | INSUN Environmental vs. JUSUNG ENGINEERING Co |
| ECSTELECOM vs. Keyang Electric Machinery | ECSTELECOM vs. Samsung Publishing Co | ECSTELECOM vs. Shinsegae Engineering Construction | ECSTELECOM vs. INSUN Environmental New |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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