Correlation Between Green Cross and Cho Bi
Can any of the company-specific risk be diversified away by investing in both Green Cross and Cho Bi 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 Green Cross and Cho Bi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cross Medical and Cho Bi Co, you can compare the effects of market volatilities on Green Cross and Cho Bi 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 Green Cross with a short position of Cho Bi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cross and Cho Bi.
Diversification Opportunities for Green Cross and Cho Bi
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Green and Cho is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Green Cross Medical and Cho Bi Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cho Bi and Green Cross 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 Green Cross Medical are associated (or correlated) with Cho Bi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cho Bi has no effect on the direction of Green Cross i.e., Green Cross and Cho Bi go up and down completely randomly.
Pair Corralation between Green Cross and Cho Bi
Assuming the 90 days trading horizon Green Cross Medical is expected to generate 2.48 times more return on investment than Cho Bi. However, Green Cross is 2.48 times more volatile than Cho Bi Co. It trades about 0.05 of its potential returns per unit of risk. Cho Bi Co is currently generating about 0.08 per unit of risk. If you would invest 367,000 in Green Cross Medical on November 3, 2024 and sell it today you would earn a total of 10,000 from holding Green Cross Medical or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cross Medical vs. Cho Bi Co
Performance |
| Timeline |
| Green Cross Medical |
| Cho Bi |
Green Cross and Cho Bi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cross and Cho Bi
The main advantage of trading using opposite Green Cross and Cho Bi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cross position performs unexpectedly, Cho Bi 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 Cho Bi will offset losses from the drop in Cho Bi's long position.| Green Cross vs. Solus Advanced Materials | Green Cross vs. WONIK Materials CoLtd | Green Cross vs. LS Materials | Green Cross vs. SK Chemicals Co |
| Cho Bi vs. DB Financial Investment | Cho Bi vs. Mobile Appliance | Cho Bi vs. Incar Financial Service | Cho Bi vs. Lotte Data Communication |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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