Correlation Between Cuckoo Electronics and Hannong Chemicals
Can any of the company-specific risk be diversified away by investing in both Cuckoo Electronics and Hannong Chemicals 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 Hannong Chemicals 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 Hannong Chemicals, you can compare the effects of market volatilities on Cuckoo Electronics and Hannong Chemicals 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 Hannong Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuckoo Electronics and Hannong Chemicals.
Diversification Opportunities for Cuckoo Electronics and Hannong Chemicals
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cuckoo and Hannong is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cuckoo Electronics Co and Hannong Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannong Chemicals 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 Hannong Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannong Chemicals has no effect on the direction of Cuckoo Electronics i.e., Cuckoo Electronics and Hannong Chemicals go up and down completely randomly.
Pair Corralation between Cuckoo Electronics and Hannong Chemicals
Assuming the 90 days trading horizon Cuckoo Electronics Co is expected to generate 0.37 times more return on investment than Hannong Chemicals. However, Cuckoo Electronics Co is 2.71 times less risky than Hannong Chemicals. It trades about -0.19 of its potential returns per unit of risk. Hannong Chemicals is currently generating about -0.27 per unit of risk. If you would invest 2,440,000 in Cuckoo Electronics Co on September 1, 2024 and sell it today you would lose (130,000) from holding Cuckoo Electronics Co or give up 5.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cuckoo Electronics Co vs. Hannong Chemicals
Performance |
| Timeline |
| Cuckoo Electronics |
| Hannong Chemicals |
Cuckoo Electronics and Hannong Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cuckoo Electronics and Hannong Chemicals
The main advantage of trading using opposite Cuckoo Electronics and Hannong Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuckoo Electronics position performs unexpectedly, Hannong Chemicals 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 Hannong Chemicals will offset losses from the drop in Hannong Chemicals' long position.| Cuckoo Electronics vs. Hyunwoo Industrial Co | Cuckoo Electronics vs. Myoung Shin Industrial | Cuckoo Electronics vs. Seoyon Topmetal Co | Cuckoo Electronics vs. Eagon Industrial Co |
| Hannong Chemicals vs. AptaBio Therapeutics | Hannong Chemicals vs. Daewoo SBI SPAC | Hannong Chemicals vs. Dream Security co | Hannong Chemicals vs. Microfriend |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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