Correlation Between MS Autotech and Insung Information
Can any of the company-specific risk be diversified away by investing in both MS Autotech and Insung Information 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 MS Autotech and Insung Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MS Autotech CoLtd and Insung Information Co, you can compare the effects of market volatilities on MS Autotech and Insung Information 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 MS Autotech with a short position of Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of MS Autotech and Insung Information.
Diversification Opportunities for MS Autotech and Insung Information
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 123040 and Insung is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding MS Autotech CoLtd and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information and MS Autotech 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 MS Autotech CoLtd are associated (or correlated) with Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of MS Autotech i.e., MS Autotech and Insung Information go up and down completely randomly.
Pair Corralation between MS Autotech and Insung Information
Assuming the 90 days trading horizon MS Autotech CoLtd is expected to under-perform the Insung Information. In addition to that, MS Autotech is 1.2 times more volatile than Insung Information Co. It trades about -0.2 of its total potential returns per unit of risk. Insung Information Co is currently generating about -0.22 per unit of volatility. If you would invest 214,000 in Insung Information Co on September 1, 2024 and sell it today you would lose (25,000) from holding Insung Information Co or give up 11.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MS Autotech CoLtd vs. Insung Information Co
Performance |
| Timeline |
| MS Autotech CoLtd |
| Insung Information |
MS Autotech and Insung Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MS Autotech and Insung Information
The main advantage of trading using opposite MS Autotech and Insung Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MS Autotech position performs unexpectedly, Insung Information 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 Insung Information will offset losses from the drop in Insung Information's long position.| MS Autotech vs. LG Display | MS Autotech vs. Hyundai Motor Co | MS Autotech vs. Hyundai Motor Co | MS Autotech vs. Adaptive Plasma Technology |
| Insung Information vs. Dongsin Engineering Construction | Insung Information vs. Doosan Fuel Cell | Insung Information vs. Daishin Balance 1 | Insung Information vs. Total Soft Bank |
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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