Correlation Between EBEST Investment and Puloon Technology
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Puloon Technology 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 Puloon Technology 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 Puloon Technology, you can compare the effects of market volatilities on EBEST Investment and Puloon Technology 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 Puloon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Puloon Technology.
Diversification Opportunities for EBEST Investment and Puloon Technology
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EBEST and Puloon is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Puloon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puloon Technology 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 Puloon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puloon Technology has no effect on the direction of EBEST Investment i.e., EBEST Investment and Puloon Technology go up and down completely randomly.
Pair Corralation between EBEST Investment and Puloon Technology
Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the Puloon Technology. But the stock apears to be less risky and, when comparing its historical volatility, EBEST Investment Securities is 1.85 times less risky than Puloon Technology. The stock trades about -0.21 of its potential returns per unit of risk. The Puloon Technology is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 610,000 in Puloon Technology on August 25, 2024 and sell it today you would lose (27,000) from holding Puloon Technology or give up 4.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Puloon Technology
Performance |
| Timeline |
| EBEST Investment Sec |
| Puloon Technology |
EBEST Investment and Puloon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Puloon Technology
The main advantage of trading using opposite EBEST Investment and Puloon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, Puloon Technology 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 Puloon Technology will offset losses from the drop in Puloon Technology's long position.| EBEST Investment vs. SKONEC Entertainment Co | EBEST Investment vs. Pan Entertainment Co | EBEST Investment vs. SS TECH | EBEST Investment vs. Konan Technology |
| Puloon Technology vs. Korea Real Estate | Puloon Technology vs. Korea Ratings Co | Puloon Technology vs. IQuest Co | Puloon Technology vs. Wonbang Tech 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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