Correlation Between Cuckoo Electronics and Hankook Furniture
Can any of the company-specific risk be diversified away by investing in both Cuckoo Electronics and Hankook Furniture 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 Cuckoo Electronics and Hankook Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cuckoo Electronics Co and Hankook Furniture Co, you can compare the effects of market volatilities on Cuckoo Electronics and Hankook Furniture 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 Cuckoo Electronics with a short position of Hankook Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuckoo Electronics and Hankook Furniture.
Diversification Opportunities for Cuckoo Electronics and Hankook Furniture
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cuckoo and Hankook is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cuckoo Electronics Co and Hankook Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Furniture and Cuckoo Electronics 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 Cuckoo Electronics Co are associated (or correlated) with Hankook Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankook Furniture has no effect on the direction of Cuckoo Electronics i.e., Cuckoo Electronics and Hankook Furniture go up and down completely randomly.
Pair Corralation between Cuckoo Electronics and Hankook Furniture
Assuming the 90 days trading horizon Cuckoo Electronics Co is expected to generate 0.97 times more return on investment than Hankook Furniture. However, Cuckoo Electronics Co is 1.03 times less risky than Hankook Furniture. It trades about 0.17 of its potential returns per unit of risk. Hankook Furniture Co is currently generating about 0.13 per unit of risk. If you would invest 2,270,000 in Cuckoo Electronics Co on September 19, 2024 and sell it today you would earn a total of 125,000 from holding Cuckoo Electronics Co or generate 5.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cuckoo Electronics Co vs. Hankook Furniture Co
Performance |
| Timeline |
| Cuckoo Electronics |
| Hankook Furniture |
Cuckoo Electronics and Hankook Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cuckoo Electronics and Hankook Furniture
The main advantage of trading using opposite Cuckoo Electronics and Hankook Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuckoo Electronics position performs unexpectedly, Hankook Furniture 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 Hankook Furniture will offset losses from the drop in Hankook Furniture's long position.| Cuckoo Electronics vs. Daou Data Corp | Cuckoo Electronics vs. Solution Advanced Technology | Cuckoo Electronics vs. Busan Industrial Co | Cuckoo Electronics vs. Busan Ind |
| Hankook Furniture vs. Daou Data Corp | Hankook Furniture vs. Solution Advanced Technology | Hankook Furniture vs. Busan Industrial Co | Hankook Furniture vs. Busan Ind |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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