Correlation Between ITM Semiconductor and Pyung Hwa
Can any of the company-specific risk be diversified away by investing in both ITM Semiconductor and Pyung Hwa 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 ITM Semiconductor and Pyung Hwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITM Semiconductor Co and Pyung Hwa Industrial, you can compare the effects of market volatilities on ITM Semiconductor and Pyung Hwa 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 ITM Semiconductor with a short position of Pyung Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Semiconductor and Pyung Hwa.
Diversification Opportunities for ITM Semiconductor and Pyung Hwa
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ITM and Pyung is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding ITM Semiconductor Co and Pyung Hwa Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyung Hwa Industrial and ITM Semiconductor 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 ITM Semiconductor Co are associated (or correlated) with Pyung Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyung Hwa Industrial has no effect on the direction of ITM Semiconductor i.e., ITM Semiconductor and Pyung Hwa go up and down completely randomly.
Pair Corralation between ITM Semiconductor and Pyung Hwa
Assuming the 90 days trading horizon ITM Semiconductor Co is expected to under-perform the Pyung Hwa. In addition to that, ITM Semiconductor is 1.55 times more volatile than Pyung Hwa Industrial. It trades about -0.31 of its total potential returns per unit of risk. Pyung Hwa Industrial is currently generating about -0.18 per unit of volatility. If you would invest 97,600 in Pyung Hwa Industrial on August 29, 2024 and sell it today you would lose (6,600) from holding Pyung Hwa Industrial or give up 6.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITM Semiconductor Co vs. Pyung Hwa Industrial
Performance |
| Timeline |
| ITM Semiconductor |
| Pyung Hwa Industrial |
ITM Semiconductor and Pyung Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITM Semiconductor and Pyung Hwa
The main advantage of trading using opposite ITM Semiconductor and Pyung Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITM Semiconductor position performs unexpectedly, Pyung Hwa 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 Pyung Hwa will offset losses from the drop in Pyung Hwa's long position.| ITM Semiconductor vs. SK Hynix | ITM Semiconductor vs. LX Semicon Co | ITM Semiconductor vs. Tokai Carbon Korea | ITM Semiconductor vs. People Technology |
| Pyung Hwa vs. Dongbang Transport Logistics | Pyung Hwa vs. ITM Semiconductor Co | Pyung Hwa vs. HB Technology TD | Pyung Hwa vs. Sewoon Medical 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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