Correlation Between Microfriend and Hwasung Industrial
Can any of the company-specific risk be diversified away by investing in both Microfriend and Hwasung Industrial 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 Microfriend and Hwasung Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and Hwasung Industrial Co, you can compare the effects of market volatilities on Microfriend and Hwasung Industrial 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 Microfriend with a short position of Hwasung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and Hwasung Industrial.
Diversification Opportunities for Microfriend and Hwasung Industrial
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Microfriend and Hwasung is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend and Hwasung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwasung Industrial and Microfriend 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 Microfriend are associated (or correlated) with Hwasung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwasung Industrial has no effect on the direction of Microfriend i.e., Microfriend and Hwasung Industrial go up and down completely randomly.
Pair Corralation between Microfriend and Hwasung Industrial
Assuming the 90 days trading horizon Microfriend is expected to generate 1.74 times more return on investment than Hwasung Industrial. However, Microfriend is 1.74 times more volatile than Hwasung Industrial Co. It trades about 0.1 of its potential returns per unit of risk. Hwasung Industrial Co is currently generating about 0.15 per unit of risk. If you would invest 293,500 in Microfriend on October 14, 2024 and sell it today you would earn a total of 12,500 from holding Microfriend or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microfriend vs. Hwasung Industrial Co
Performance |
| Timeline |
| Microfriend |
| Hwasung Industrial |
Microfriend and Hwasung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and Hwasung Industrial
The main advantage of trading using opposite Microfriend and Hwasung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend position performs unexpectedly, Hwasung Industrial 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 Hwasung Industrial will offset losses from the drop in Hwasung Industrial's long position.| Microfriend vs. Nh Investment And | Microfriend vs. Sungchang Autotech Co | Microfriend vs. Yura Tech Co | Microfriend vs. Eagle Veterinary Technology |
| Hwasung Industrial vs. Songwon Industrial Co | Hwasung Industrial vs. ABOV Semiconductor Co | Hwasung Industrial vs. Handok Clean Tech | Hwasung Industrial vs. Cheryong Industrial CoLtd |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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