Correlation Between Cheryong Industrial and Microfriend
Can any of the company-specific risk be diversified away by investing in both Cheryong Industrial and Microfriend 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 Microfriend 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 Microfriend, you can compare the effects of market volatilities on Cheryong Industrial and Microfriend 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 Microfriend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheryong Industrial and Microfriend.
Diversification Opportunities for Cheryong Industrial and Microfriend
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cheryong and Microfriend is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cheryong Industrial CoLtd and Microfriend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microfriend 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 Microfriend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microfriend has no effect on the direction of Cheryong Industrial i.e., Cheryong Industrial and Microfriend go up and down completely randomly.
Pair Corralation between Cheryong Industrial and Microfriend
Assuming the 90 days trading horizon Cheryong Industrial CoLtd is expected to generate 1.15 times more return on investment than Microfriend. However, Cheryong Industrial is 1.15 times more volatile than Microfriend. It trades about 0.04 of its potential returns per unit of risk. Microfriend is currently generating about -0.02 per unit of risk. If you would invest 453,344 in Cheryong Industrial CoLtd on August 28, 2024 and sell it today you would earn a total of 134,656 from holding Cheryong Industrial CoLtd or generate 29.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheryong Industrial CoLtd vs. Microfriend
Performance |
| Timeline |
| Cheryong Industrial CoLtd |
| Microfriend |
Cheryong Industrial and Microfriend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheryong Industrial and Microfriend
The main advantage of trading using opposite Cheryong Industrial and Microfriend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheryong Industrial position performs unexpectedly, Microfriend 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 Microfriend will offset losses from the drop in Microfriend's long position.| Cheryong Industrial vs. iNtRON Biotechnology | Cheryong Industrial vs. Samsung Life Insurance | Cheryong Industrial vs. InfoBank | Cheryong Industrial vs. Lotte Chilsung Beverage |
| Microfriend vs. SK Hynix | Microfriend vs. People Technology | Microfriend vs. SIMMTECH Co | Microfriend vs. Haesung DS 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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