Correlation Between Pyung Hwa and UJU Electronics
Can any of the company-specific risk be diversified away by investing in both Pyung Hwa and UJU Electronics 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 UJU Electronics 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 UJU Electronics Co, you can compare the effects of market volatilities on Pyung Hwa and UJU Electronics 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 UJU Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pyung Hwa and UJU Electronics.
Diversification Opportunities for Pyung Hwa and UJU Electronics
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pyung and UJU is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pyung Hwa Industrial and UJU Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UJU Electronics 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 UJU Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UJU Electronics has no effect on the direction of Pyung Hwa i.e., Pyung Hwa and UJU Electronics go up and down completely randomly.
Pair Corralation between Pyung Hwa and UJU Electronics
Assuming the 90 days trading horizon Pyung Hwa Industrial is expected to generate 2.17 times more return on investment than UJU Electronics. However, Pyung Hwa is 2.17 times more volatile than UJU Electronics Co. It trades about 0.3 of its potential returns per unit of risk. UJU Electronics Co is currently generating about 0.16 per unit of risk. If you would invest 90,000 in Pyung Hwa Industrial on November 7, 2024 and sell it today you would earn a total of 37,700 from holding Pyung Hwa Industrial or generate 41.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Pyung Hwa Industrial vs. UJU Electronics Co
Performance |
| Timeline |
| Pyung Hwa Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| UJU Electronics |
Pyung Hwa and UJU Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pyung Hwa and UJU Electronics
The main advantage of trading using opposite Pyung Hwa and UJU Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pyung Hwa position performs unexpectedly, UJU Electronics 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 UJU Electronics will offset losses from the drop in UJU Electronics' long position.| Pyung Hwa vs. Dongwoon Anatech Co | Pyung Hwa vs. Cots Technology Co | Pyung Hwa vs. Dongbang Transport Logistics | Pyung Hwa vs. Spolytech Co |
| UJU Electronics vs. Vitzro Tech Co | UJU Electronics vs. Narae Nanotech Corp | UJU Electronics vs. Daehan Synthetic Fiber | UJU Electronics vs. ISU Chemical 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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