Correlation Between Formetal and Guyoung Technology
Can any of the company-specific risk be diversified away by investing in both Formetal and Guyoung Technology 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 Formetal and Guyoung Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Formetal Co and Guyoung Technology Co, you can compare the effects of market volatilities on Formetal and Guyoung Technology 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 Formetal with a short position of Guyoung Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Formetal and Guyoung Technology.
Diversification Opportunities for Formetal and Guyoung Technology
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Formetal and Guyoung is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Formetal Co and Guyoung Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guyoung Technology and Formetal 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 Formetal Co are associated (or correlated) with Guyoung Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guyoung Technology has no effect on the direction of Formetal i.e., Formetal and Guyoung Technology go up and down completely randomly.
Pair Corralation between Formetal and Guyoung Technology
Assuming the 90 days trading horizon Formetal Co is expected to generate 1.1 times more return on investment than Guyoung Technology. However, Formetal is 1.1 times more volatile than Guyoung Technology Co. It trades about -0.09 of its potential returns per unit of risk. Guyoung Technology Co is currently generating about -0.15 per unit of risk. If you would invest 279,500 in Formetal Co on August 28, 2024 and sell it today you would lose (10,000) from holding Formetal Co or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Formetal Co vs. Guyoung Technology Co
Performance |
| Timeline |
| Formetal |
| Guyoung Technology |
Formetal and Guyoung Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Formetal and Guyoung Technology
The main advantage of trading using opposite Formetal and Guyoung Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Formetal position performs unexpectedly, Guyoung Technology 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 Guyoung Technology will offset losses from the drop in Guyoung Technology's long position.| Formetal vs. Rainbow Robotics | Formetal vs. COWINTECH Co | Formetal vs. CS BEARING CoLtd | Formetal vs. DAEMO Engineering Co |
| Guyoung Technology vs. Busan Industrial Co | Guyoung Technology vs. Busan Ind | Guyoung Technology vs. Mirae Asset Daewoo | Guyoung Technology vs. UNISEM 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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