Correlation Between EBEST Investment and AhnLab
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and AhnLab 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 EBEST Investment and AhnLab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and AhnLab Inc, you can compare the effects of market volatilities on EBEST Investment and AhnLab 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 EBEST Investment with a short position of AhnLab. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and AhnLab.
Diversification Opportunities for EBEST Investment and AhnLab
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EBEST and AhnLab is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and AhnLab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AhnLab Inc and EBEST Investment 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 EBEST Investment Securities are associated (or correlated) with AhnLab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AhnLab Inc has no effect on the direction of EBEST Investment i.e., EBEST Investment and AhnLab go up and down completely randomly.
Pair Corralation between EBEST Investment and AhnLab
Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the AhnLab. But the stock apears to be less risky and, when comparing its historical volatility, EBEST Investment Securities is 2.42 times less risky than AhnLab. The stock trades about -0.2 of its potential returns per unit of risk. The AhnLab Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,770,000 in AhnLab Inc on August 28, 2024 and sell it today you would earn a total of 30,000 from holding AhnLab Inc or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. AhnLab Inc
Performance |
| Timeline |
| EBEST Investment Sec |
| AhnLab Inc |
EBEST Investment and AhnLab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and AhnLab
The main advantage of trading using opposite EBEST Investment and AhnLab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, AhnLab 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 AhnLab will offset losses from the drop in AhnLab's long position.| EBEST Investment vs. Korea New Network | EBEST Investment vs. Dong A Eltek | EBEST Investment vs. Dreamus Company | EBEST Investment vs. SK Bioscience 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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