Correlation Between Hironic and DIGITAL CHOSUN
Can any of the company-specific risk be diversified away by investing in both Hironic and DIGITAL CHOSUN 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 Hironic and DIGITAL CHOSUN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hironic Co and DIGITAL CHOSUN, you can compare the effects of market volatilities on Hironic and DIGITAL CHOSUN 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 Hironic with a short position of DIGITAL CHOSUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hironic and DIGITAL CHOSUN.
Diversification Opportunities for Hironic and DIGITAL CHOSUN
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hironic and DIGITAL is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hironic Co and DIGITAL CHOSUN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIGITAL CHOSUN and Hironic 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 Hironic Co are associated (or correlated) with DIGITAL CHOSUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIGITAL CHOSUN has no effect on the direction of Hironic i.e., Hironic and DIGITAL CHOSUN go up and down completely randomly.
Pair Corralation between Hironic and DIGITAL CHOSUN
Assuming the 90 days trading horizon Hironic Co is expected to generate 1.33 times more return on investment than DIGITAL CHOSUN. However, Hironic is 1.33 times more volatile than DIGITAL CHOSUN. It trades about -0.02 of its potential returns per unit of risk. DIGITAL CHOSUN is currently generating about -0.09 per unit of risk. If you would invest 640,000 in Hironic Co on October 13, 2024 and sell it today you would lose (11,000) from holding Hironic Co or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hironic Co vs. DIGITAL CHOSUN
Performance |
| Timeline |
| Hironic |
| DIGITAL CHOSUN |
Hironic and DIGITAL CHOSUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hironic and DIGITAL CHOSUN
The main advantage of trading using opposite Hironic and DIGITAL CHOSUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hironic position performs unexpectedly, DIGITAL CHOSUN 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 DIGITAL CHOSUN will offset losses from the drop in DIGITAL CHOSUN's long position.| Hironic vs. Korea Computer | Hironic vs. BIT Computer Co | Hironic vs. Ssangyong Information Communication | Hironic vs. Seers Technology |
| DIGITAL CHOSUN vs. Hankook Steel Co | DIGITAL CHOSUN vs. Korea Steel Co | DIGITAL CHOSUN vs. Korean Reinsurance Co | DIGITAL CHOSUN vs. Hironic 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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