Correlation Between Cuckoo Electronics and Oriental Precision
Can any of the company-specific risk be diversified away by investing in both Cuckoo Electronics and Oriental Precision 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 Oriental Precision 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 Oriental Precision Engineering, you can compare the effects of market volatilities on Cuckoo Electronics and Oriental Precision 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 Oriental Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuckoo Electronics and Oriental Precision.
Diversification Opportunities for Cuckoo Electronics and Oriental Precision
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cuckoo and Oriental is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cuckoo Electronics Co and Oriental Precision Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Precision 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 Oriental Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Precision has no effect on the direction of Cuckoo Electronics i.e., Cuckoo Electronics and Oriental Precision go up and down completely randomly.
Pair Corralation between Cuckoo Electronics and Oriental Precision
Assuming the 90 days trading horizon Cuckoo Electronics is expected to generate 1.08 times less return on investment than Oriental Precision. But when comparing it to its historical volatility, Cuckoo Electronics Co is 1.51 times less risky than Oriental Precision. It trades about 0.07 of its potential returns per unit of risk. Oriental Precision Engineering is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 361,055 in Oriental Precision Engineering on October 12, 2024 and sell it today you would earn a total of 190,945 from holding Oriental Precision Engineering or generate 52.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Cuckoo Electronics Co vs. Oriental Precision Engineering
Performance |
| Timeline |
| Cuckoo Electronics |
| Oriental Precision |
Cuckoo Electronics and Oriental Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cuckoo Electronics and Oriental Precision
The main advantage of trading using opposite Cuckoo Electronics and Oriental Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuckoo Electronics position performs unexpectedly, Oriental Precision 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 Oriental Precision will offset losses from the drop in Oriental Precision's long position.| Cuckoo Electronics vs. Jeju Air Co | Cuckoo Electronics vs. Digital Power Communications | Cuckoo Electronics vs. CU Tech Corp | Cuckoo Electronics vs. Tway Air Co |
| Oriental Precision vs. TS Investment Corp | Oriental Precision vs. Atinum Investment Co | Oriental Precision vs. Korea Information Communications | Oriental Precision vs. Dongbang Transport Logistics |
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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