Correlation Between ECSTELECOM and Yura Tech
Can any of the company-specific risk be diversified away by investing in both ECSTELECOM and Yura Tech 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 ECSTELECOM and Yura Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECSTELECOM Co and Yura Tech Co, you can compare the effects of market volatilities on ECSTELECOM and Yura Tech 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 ECSTELECOM with a short position of Yura Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECSTELECOM and Yura Tech.
Diversification Opportunities for ECSTELECOM and Yura Tech
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ECSTELECOM and Yura is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding ECSTELECOM Co and Yura Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yura Tech and ECSTELECOM 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 ECSTELECOM Co are associated (or correlated) with Yura Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yura Tech has no effect on the direction of ECSTELECOM i.e., ECSTELECOM and Yura Tech go up and down completely randomly.
Pair Corralation between ECSTELECOM and Yura Tech
Assuming the 90 days trading horizon ECSTELECOM Co is expected to generate 0.5 times more return on investment than Yura Tech. However, ECSTELECOM Co is 1.99 times less risky than Yura Tech. It trades about -0.02 of its potential returns per unit of risk. Yura Tech Co is currently generating about -0.01 per unit of risk. If you would invest 343,455 in ECSTELECOM Co on August 31, 2024 and sell it today you would lose (56,455) from holding ECSTELECOM Co or give up 16.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECSTELECOM Co vs. Yura Tech Co
Performance |
| Timeline |
| ECSTELECOM |
| Yura Tech |
ECSTELECOM and Yura Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECSTELECOM and Yura Tech
The main advantage of trading using opposite ECSTELECOM and Yura Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECSTELECOM position performs unexpectedly, Yura Tech 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 Yura Tech will offset losses from the drop in Yura Tech's long position.| ECSTELECOM vs. Busan Industrial Co | ECSTELECOM vs. Busan Ind | ECSTELECOM vs. Mirae Asset Daewoo | ECSTELECOM vs. Finebesteel |
| Yura Tech vs. LG Display | Yura Tech vs. Hyundai Motor | Yura Tech vs. Hyundai Motor Co | Yura Tech vs. Hyundai Motor 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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