Correlation Between Cheryong Industrial and UJU Electronics
Can any of the company-specific risk be diversified away by investing in both Cheryong Industrial and UJU Electronics 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 UJU Electronics 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 UJU Electronics Co, you can compare the effects of market volatilities on Cheryong Industrial and UJU Electronics 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 UJU Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheryong Industrial and UJU Electronics.
Diversification Opportunities for Cheryong Industrial and UJU Electronics
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cheryong and UJU is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cheryong Industrial CoLtd and UJU Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UJU Electronics 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 UJU Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UJU Electronics has no effect on the direction of Cheryong Industrial i.e., Cheryong Industrial and UJU Electronics go up and down completely randomly.
Pair Corralation between Cheryong Industrial and UJU Electronics
Assuming the 90 days trading horizon Cheryong Industrial CoLtd is expected to generate 1.5 times more return on investment than UJU Electronics. However, Cheryong Industrial is 1.5 times more volatile than UJU Electronics Co. It trades about 0.05 of its potential returns per unit of risk. UJU Electronics Co is currently generating about 0.03 per unit of risk. If you would invest 299,888 in Cheryong Industrial CoLtd on October 13, 2024 and sell it today you would earn a total of 295,112 from holding Cheryong Industrial CoLtd or generate 98.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheryong Industrial CoLtd vs. UJU Electronics Co
Performance |
| Timeline |
| Cheryong Industrial CoLtd |
| UJU Electronics |
Cheryong Industrial and UJU Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheryong Industrial and UJU Electronics
The main advantage of trading using opposite Cheryong Industrial and UJU Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheryong Industrial position performs unexpectedly, UJU Electronics 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 UJU Electronics will offset losses from the drop in UJU Electronics' long position.| Cheryong Industrial vs. Shin Steel Co | Cheryong Industrial vs. Formetal Co | Cheryong Industrial vs. Jeil Steel Mfg | Cheryong Industrial vs. Dongil Metal Co |
| UJU Electronics vs. Hanwha Life Insurance | UJU Electronics vs. Cheryong Industrial CoLtd | UJU Electronics vs. Hyundai Industrial Co | UJU Electronics vs. Korean Reinsurance 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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