Correlation Between Cheryong Industrial and Haesung Industrial
Can any of the company-specific risk be diversified away by investing in both Cheryong Industrial and Haesung 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 Cheryong Industrial and Haesung Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheryong Industrial CoLtd and Haesung Industrial Co, you can compare the effects of market volatilities on Cheryong Industrial and Haesung 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 Cheryong Industrial with a short position of Haesung Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheryong Industrial and Haesung Industrial.
Diversification Opportunities for Cheryong Industrial and Haesung Industrial
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cheryong and Haesung is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cheryong Industrial CoLtd and Haesung Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung Industrial and Cheryong Industrial 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 Cheryong Industrial CoLtd are associated (or correlated) with Haesung Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung Industrial has no effect on the direction of Cheryong Industrial i.e., Cheryong Industrial and Haesung Industrial go up and down completely randomly.
Pair Corralation between Cheryong Industrial and Haesung Industrial
Assuming the 90 days trading horizon Cheryong Industrial CoLtd is expected to under-perform the Haesung Industrial. In addition to that, Cheryong Industrial is 2.09 times more volatile than Haesung Industrial Co. It trades about -0.27 of its total potential returns per unit of risk. Haesung Industrial Co is currently generating about -0.35 per unit of volatility. If you would invest 671,000 in Haesung Industrial Co on September 3, 2024 and sell it today you would lose (78,000) from holding Haesung Industrial Co or give up 11.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheryong Industrial CoLtd vs. Haesung Industrial Co
Performance |
| Timeline |
| Cheryong Industrial CoLtd |
| Haesung Industrial |
Cheryong Industrial and Haesung Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheryong Industrial and Haesung Industrial
The main advantage of trading using opposite Cheryong Industrial and Haesung Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheryong Industrial position performs unexpectedly, Haesung 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 Haesung Industrial will offset losses from the drop in Haesung Industrial's long position.| Cheryong Industrial vs. SEOJEON ELECTRIC MACHINERY | Cheryong Industrial vs. NH Investment Securities | Cheryong Industrial vs. Keyang Electric Machinery | Cheryong Industrial vs. Atinum Investment Co |
| Haesung Industrial vs. Busan Industrial Co | Haesung Industrial vs. UNISEM Co | Haesung Industrial vs. RPBio Inc | Haesung Industrial vs. Finebesteel |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |