Correlation Between PI Advanced and Korea Shipbuilding
Can any of the company-specific risk be diversified away by investing in both PI Advanced and Korea Shipbuilding 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 PI Advanced and Korea Shipbuilding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PI Advanced Materials and Korea Shipbuilding Offshore, you can compare the effects of market volatilities on PI Advanced and Korea Shipbuilding 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 PI Advanced with a short position of Korea Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of PI Advanced and Korea Shipbuilding.
Diversification Opportunities for PI Advanced and Korea Shipbuilding
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between 178920 and Korea is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding PI Advanced Materials and Korea Shipbuilding Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Shipbuilding and PI Advanced 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 PI Advanced Materials are associated (or correlated) with Korea Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Shipbuilding has no effect on the direction of PI Advanced i.e., PI Advanced and Korea Shipbuilding go up and down completely randomly.
Pair Corralation between PI Advanced and Korea Shipbuilding
Assuming the 90 days trading horizon PI Advanced Materials is expected to under-perform the Korea Shipbuilding. In addition to that, PI Advanced is 1.22 times more volatile than Korea Shipbuilding Offshore. It trades about -0.03 of its total potential returns per unit of risk. Korea Shipbuilding Offshore is currently generating about 0.11 per unit of volatility. If you would invest 8,410,000 in Korea Shipbuilding Offshore on August 29, 2024 and sell it today you would earn a total of 13,190,000 from holding Korea Shipbuilding Offshore or generate 156.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PI Advanced Materials vs. Korea Shipbuilding Offshore
Performance |
| Timeline |
| PI Advanced Materials |
| Korea Shipbuilding |
PI Advanced and Korea Shipbuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PI Advanced and Korea Shipbuilding
The main advantage of trading using opposite PI Advanced and Korea Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PI Advanced position performs unexpectedly, Korea Shipbuilding 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 Korea Shipbuilding will offset losses from the drop in Korea Shipbuilding's long position.| PI Advanced vs. Samsung Electronics Co | PI Advanced vs. Samsung Electronics Co | PI Advanced vs. LG Energy Solution | PI Advanced vs. SK Hynix |
| Korea Shipbuilding vs. Samsung Electronics Co | Korea Shipbuilding vs. Samsung Electronics Co | Korea Shipbuilding vs. Hyundai Motor Co | Korea Shipbuilding vs. Hyundai Motor |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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