Correlation Between Ewon Comfortech and Humedix
Can any of the company-specific risk be diversified away by investing in both Ewon Comfortech and Humedix 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 Ewon Comfortech and Humedix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ewon Comfortech Co and Humedix Co, you can compare the effects of market volatilities on Ewon Comfortech and Humedix 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 Ewon Comfortech with a short position of Humedix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ewon Comfortech and Humedix.
Diversification Opportunities for Ewon Comfortech and Humedix
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ewon and Humedix is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ewon Comfortech Co and Humedix Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humedix and Ewon Comfortech 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 Ewon Comfortech Co are associated (or correlated) with Humedix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humedix has no effect on the direction of Ewon Comfortech i.e., Ewon Comfortech and Humedix go up and down completely randomly.
Pair Corralation between Ewon Comfortech and Humedix
Assuming the 90 days trading horizon Ewon Comfortech Co is expected to under-perform the Humedix. But the stock apears to be less risky and, when comparing its historical volatility, Ewon Comfortech Co is 1.23 times less risky than Humedix. The stock trades about -0.18 of its potential returns per unit of risk. The Humedix Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,085,000 in Humedix Co on August 31, 2024 and sell it today you would earn a total of 105,000 from holding Humedix Co or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ewon Comfortech Co vs. Humedix Co
Performance |
| Timeline |
| Ewon Comfortech |
| Humedix |
Ewon Comfortech and Humedix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ewon Comfortech and Humedix
The main advantage of trading using opposite Ewon Comfortech and Humedix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ewon Comfortech position performs unexpectedly, Humedix 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 Humedix will offset losses from the drop in Humedix's long position.| Ewon Comfortech vs. LG Display | Ewon Comfortech vs. Hyundai Motor | Ewon Comfortech vs. Hyundai Motor Co | Ewon Comfortech 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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