Correlation Between ENERGYMACHINERY KOREA and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both ENERGYMACHINERY KOREA and Heungkuk Metaltech 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 ENERGYMACHINERY KOREA and Heungkuk Metaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENERGYMACHINERY KOREA CoLtd and Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on ENERGYMACHINERY KOREA and Heungkuk Metaltech 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 ENERGYMACHINERY KOREA with a short position of Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENERGYMACHINERY KOREA and Heungkuk Metaltech.
Diversification Opportunities for ENERGYMACHINERY KOREA and Heungkuk Metaltech
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ENERGYMACHINERY and Heungkuk is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding ENERGYMACHINERY KOREA CoLtd and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd and ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA CoLtd are associated (or correlated) with Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of ENERGYMACHINERY KOREA i.e., ENERGYMACHINERY KOREA and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between ENERGYMACHINERY KOREA and Heungkuk Metaltech
Assuming the 90 days trading horizon ENERGYMACHINERY KOREA CoLtd is expected to generate 1.13 times more return on investment than Heungkuk Metaltech. However, ENERGYMACHINERY KOREA is 1.13 times more volatile than Heungkuk Metaltech CoLtd. It trades about 0.02 of its potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about -0.16 per unit of risk. If you would invest 224,500 in ENERGYMACHINERY KOREA CoLtd on November 3, 2024 and sell it today you would earn a total of 500.00 from holding ENERGYMACHINERY KOREA CoLtd or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENERGYMACHINERY KOREA CoLtd vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| ENERGYMACHINERY KOREA |
| Heungkuk Metaltech CoLtd |
ENERGYMACHINERY KOREA and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENERGYMACHINERY KOREA and Heungkuk Metaltech
The main advantage of trading using opposite ENERGYMACHINERY KOREA and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENERGYMACHINERY KOREA position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.| ENERGYMACHINERY KOREA vs. Samsung Card Co | ENERGYMACHINERY KOREA vs. EBEST Investment Securities | ENERGYMACHINERY KOREA vs. Koh Young Technology | ENERGYMACHINERY KOREA vs. Hansol Chemica |
| Heungkuk Metaltech vs. Hanwha Life Insurance | Heungkuk Metaltech vs. Dongbang Transport Logistics | Heungkuk Metaltech vs. Haitai Confectionery Foods | Heungkuk Metaltech vs. CJ Seafood Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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