Correlation Between ECSTELECOM and MEDIPOST
Can any of the company-specific risk be diversified away by investing in both ECSTELECOM and MEDIPOST 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 MEDIPOST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECSTELECOM Co and MEDIPOST Co, you can compare the effects of market volatilities on ECSTELECOM and MEDIPOST 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 MEDIPOST. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECSTELECOM and MEDIPOST.
Diversification Opportunities for ECSTELECOM and MEDIPOST
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between ECSTELECOM and MEDIPOST is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding ECSTELECOM Co and MEDIPOST Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIPOST 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 MEDIPOST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIPOST has no effect on the direction of ECSTELECOM i.e., ECSTELECOM and MEDIPOST go up and down completely randomly.
Pair Corralation between ECSTELECOM and MEDIPOST
Assuming the 90 days trading horizon ECSTELECOM Co is expected to under-perform the MEDIPOST. But the stock apears to be less risky and, when comparing its historical volatility, ECSTELECOM Co is 2.03 times less risky than MEDIPOST. The stock trades about -0.04 of its potential returns per unit of risk. The MEDIPOST Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 775,000 in MEDIPOST Co on September 12, 2024 and sell it today you would earn a total of 225,000 from holding MEDIPOST Co or generate 29.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECSTELECOM Co vs. MEDIPOST Co
Performance |
| Timeline |
| ECSTELECOM |
| MEDIPOST |
ECSTELECOM and MEDIPOST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECSTELECOM and MEDIPOST
The main advantage of trading using opposite ECSTELECOM and MEDIPOST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECSTELECOM position performs unexpectedly, MEDIPOST 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 MEDIPOST will offset losses from the drop in MEDIPOST's long position.| ECSTELECOM vs. Solution Advanced Technology | ECSTELECOM vs. Busan Industrial Co | ECSTELECOM vs. Busan Ind | ECSTELECOM vs. Sam Chun Dang |
| MEDIPOST vs. Homecast CoLtd | MEDIPOST vs. Hankook Furniture Co | MEDIPOST vs. Seoam Machinery Industry | MEDIPOST vs. Dongwoo Farm To |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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