Correlation Between Cheryong Industrial and Aprogen Healthcare
Can any of the company-specific risk be diversified away by investing in both Cheryong Industrial and Aprogen Healthcare 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 Aprogen Healthcare 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 Aprogen Healthcare Games, you can compare the effects of market volatilities on Cheryong Industrial and Aprogen Healthcare 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 Aprogen Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheryong Industrial and Aprogen Healthcare.
Diversification Opportunities for Cheryong Industrial and Aprogen Healthcare
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cheryong and Aprogen is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cheryong Industrial CoLtd and Aprogen Healthcare Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aprogen Healthcare Games 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 Aprogen Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aprogen Healthcare Games has no effect on the direction of Cheryong Industrial i.e., Cheryong Industrial and Aprogen Healthcare go up and down completely randomly.
Pair Corralation between Cheryong Industrial and Aprogen Healthcare
Assuming the 90 days trading horizon Cheryong Industrial CoLtd is expected to generate 0.79 times more return on investment than Aprogen Healthcare. However, Cheryong Industrial CoLtd is 1.26 times less risky than Aprogen Healthcare. It trades about -0.1 of its potential returns per unit of risk. Aprogen Healthcare Games is currently generating about -0.09 per unit of risk. If you would invest 617,000 in Cheryong Industrial CoLtd on August 30, 2024 and sell it today you would lose (52,000) from holding Cheryong Industrial CoLtd or give up 8.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cheryong Industrial CoLtd vs. Aprogen Healthcare Games
Performance |
| Timeline |
| Cheryong Industrial CoLtd |
| Aprogen Healthcare Games |
Cheryong Industrial and Aprogen Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheryong Industrial and Aprogen Healthcare
The main advantage of trading using opposite Cheryong Industrial and Aprogen Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheryong Industrial position performs unexpectedly, Aprogen Healthcare 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 Aprogen Healthcare will offset losses from the drop in Aprogen Healthcare's long position.| Cheryong Industrial vs. Lion Chemtech Co | Cheryong Industrial vs. Kuk Young GM | Cheryong Industrial vs. Nature and Environment | Cheryong Industrial vs. IL Science Co |
| Aprogen Healthcare vs. Daou Data Corp | Aprogen Healthcare vs. Busan Industrial Co | Aprogen Healthcare vs. Busan Ind | Aprogen Healthcare vs. Shinhan WTI Futures |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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