Correlation Between Puloon Technology and TOPMATERIAL
Can any of the company-specific risk be diversified away by investing in both Puloon Technology and TOPMATERIAL 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 Puloon Technology and TOPMATERIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puloon Technology and TOPMATERIAL LTD, you can compare the effects of market volatilities on Puloon Technology and TOPMATERIAL 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 Puloon Technology with a short position of TOPMATERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puloon Technology and TOPMATERIAL.
Diversification Opportunities for Puloon Technology and TOPMATERIAL
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Puloon and TOPMATERIAL is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Puloon Technology and TOPMATERIAL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOPMATERIAL LTD and Puloon Technology 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 Puloon Technology are associated (or correlated) with TOPMATERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOPMATERIAL LTD has no effect on the direction of Puloon Technology i.e., Puloon Technology and TOPMATERIAL go up and down completely randomly.
Pair Corralation between Puloon Technology and TOPMATERIAL
Assuming the 90 days trading horizon Puloon Technology is expected to generate 1.4 times less return on investment than TOPMATERIAL. But when comparing it to its historical volatility, Puloon Technology is 1.25 times less risky than TOPMATERIAL. It trades about 0.01 of its potential returns per unit of risk. TOPMATERIAL LTD is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,215,000 in TOPMATERIAL LTD on October 12, 2024 and sell it today you would lose (335,000) from holding TOPMATERIAL LTD or give up 10.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Puloon Technology vs. TOPMATERIAL LTD
Performance |
| Timeline |
| Puloon Technology |
| TOPMATERIAL LTD |
Puloon Technology and TOPMATERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puloon Technology and TOPMATERIAL
The main advantage of trading using opposite Puloon Technology and TOPMATERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puloon Technology position performs unexpectedly, TOPMATERIAL 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 TOPMATERIAL will offset losses from the drop in TOPMATERIAL's long position.| Puloon Technology vs. KMH Hitech Co | Puloon Technology vs. GemVaxKAEL CoLtd | Puloon Technology vs. Bosung Power Technology | Puloon Technology vs. Busan Industrial Co |
| TOPMATERIAL vs. Lotte Non Life Insurance | TOPMATERIAL vs. KyungIn Electronics Co | TOPMATERIAL vs. Puloon Technology | TOPMATERIAL vs. DB Insurance 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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