Correlation Between ENERGYMACHINERY KOREA and Amogreentech
Can any of the company-specific risk be diversified away by investing in both ENERGYMACHINERY KOREA and Amogreentech 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 Amogreentech 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 Amogreentech Co, you can compare the effects of market volatilities on ENERGYMACHINERY KOREA and Amogreentech 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 Amogreentech. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENERGYMACHINERY KOREA and Amogreentech.
Diversification Opportunities for ENERGYMACHINERY KOREA and Amogreentech
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ENERGYMACHINERY and Amogreentech is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding ENERGYMACHINERY KOREA CoLtd and Amogreentech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech 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 Amogreentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech has no effect on the direction of ENERGYMACHINERY KOREA i.e., ENERGYMACHINERY KOREA and Amogreentech go up and down completely randomly.
Pair Corralation between ENERGYMACHINERY KOREA and Amogreentech
Assuming the 90 days trading horizon ENERGYMACHINERY KOREA CoLtd is expected to generate 0.78 times more return on investment than Amogreentech. However, ENERGYMACHINERY KOREA CoLtd is 1.28 times less risky than Amogreentech. It trades about 0.23 of its potential returns per unit of risk. Amogreentech Co is currently generating about -0.02 per unit of risk. If you would invest 181,700 in ENERGYMACHINERY KOREA CoLtd on October 30, 2024 and sell it today you would earn a total of 46,800 from holding ENERGYMACHINERY KOREA CoLtd or generate 25.76% 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. Amogreentech Co
Performance |
| Timeline |
| ENERGYMACHINERY KOREA |
| Amogreentech |
ENERGYMACHINERY KOREA and Amogreentech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENERGYMACHINERY KOREA and Amogreentech
The main advantage of trading using opposite ENERGYMACHINERY KOREA and Amogreentech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENERGYMACHINERY KOREA position performs unexpectedly, Amogreentech 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 Amogreentech will offset losses from the drop in Amogreentech's long position.| ENERGYMACHINERY KOREA vs. Samsung Electronics Co | ENERGYMACHINERY KOREA vs. Samsung Electronics Co | ENERGYMACHINERY KOREA vs. KB Financial Group | ENERGYMACHINERY KOREA vs. Shinhan Financial Group |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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