Correlation Between Pyung Hwa and Korea Real
Can any of the company-specific risk be diversified away by investing in both Pyung Hwa and Korea Real 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 Pyung Hwa and Korea Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pyung Hwa Industrial and Korea Real Estate, you can compare the effects of market volatilities on Pyung Hwa and Korea Real 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 Pyung Hwa with a short position of Korea Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pyung Hwa and Korea Real.
Diversification Opportunities for Pyung Hwa and Korea Real
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pyung and Korea is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Pyung Hwa Industrial and Korea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Real Estate and Pyung Hwa 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 Pyung Hwa Industrial are associated (or correlated) with Korea Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Real Estate has no effect on the direction of Pyung Hwa i.e., Pyung Hwa and Korea Real go up and down completely randomly.
Pair Corralation between Pyung Hwa and Korea Real
Assuming the 90 days trading horizon Pyung Hwa Industrial is expected to under-perform the Korea Real. In addition to that, Pyung Hwa is 1.91 times more volatile than Korea Real Estate. It trades about -0.09 of its total potential returns per unit of risk. Korea Real Estate is currently generating about -0.03 per unit of volatility. If you would invest 107,500 in Korea Real Estate on August 27, 2024 and sell it today you would lose (5,300) from holding Korea Real Estate or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pyung Hwa Industrial vs. Korea Real Estate
Performance |
| Timeline |
| Pyung Hwa Industrial |
| Korea Real Estate |
Pyung Hwa and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pyung Hwa and Korea Real
The main advantage of trading using opposite Pyung Hwa and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pyung Hwa position performs unexpectedly, Korea Real 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 Korea Real will offset losses from the drop in Korea Real's long position.| Pyung Hwa vs. AptaBio Therapeutics | Pyung Hwa vs. Daewoo SBI SPAC | Pyung Hwa vs. Dream Security co | Pyung Hwa vs. Microfriend |
| Korea Real vs. Sam Yang Foods | Korea Real vs. Pyung Hwa Industrial | Korea Real vs. PJ Metal Co | Korea Real vs. Seoul Food Industrial |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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