Correlation Between SIMMTECH and ENERGYMACHINERY KOREA
Can any of the company-specific risk be diversified away by investing in both SIMMTECH and ENERGYMACHINERY KOREA 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 SIMMTECH and ENERGYMACHINERY KOREA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMMTECH Co and ENERGYMACHINERY KOREA CoLtd, you can compare the effects of market volatilities on SIMMTECH and ENERGYMACHINERY KOREA 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 SIMMTECH with a short position of ENERGYMACHINERY KOREA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMMTECH and ENERGYMACHINERY KOREA.
Diversification Opportunities for SIMMTECH and ENERGYMACHINERY KOREA
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SIMMTECH and ENERGYMACHINERY is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SIMMTECH Co and ENERGYMACHINERY KOREA CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENERGYMACHINERY KOREA and SIMMTECH 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 SIMMTECH Co are associated (or correlated) with ENERGYMACHINERY KOREA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENERGYMACHINERY KOREA has no effect on the direction of SIMMTECH i.e., SIMMTECH and ENERGYMACHINERY KOREA go up and down completely randomly.
Pair Corralation between SIMMTECH and ENERGYMACHINERY KOREA
Assuming the 90 days trading horizon SIMMTECH Co is expected to under-perform the ENERGYMACHINERY KOREA. In addition to that, SIMMTECH is 1.13 times more volatile than ENERGYMACHINERY KOREA CoLtd. It trades about -0.23 of its total potential returns per unit of risk. ENERGYMACHINERY KOREA CoLtd is currently generating about -0.24 per unit of volatility. If you would invest 199,700 in ENERGYMACHINERY KOREA CoLtd on September 13, 2024 and sell it today you would lose (28,800) from holding ENERGYMACHINERY KOREA CoLtd or give up 14.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIMMTECH Co vs. ENERGYMACHINERY KOREA CoLtd
Performance |
| Timeline |
| SIMMTECH |
| ENERGYMACHINERY KOREA |
SIMMTECH and ENERGYMACHINERY KOREA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMMTECH and ENERGYMACHINERY KOREA
The main advantage of trading using opposite SIMMTECH and ENERGYMACHINERY KOREA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMMTECH position performs unexpectedly, ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA will offset losses from the drop in ENERGYMACHINERY KOREA's long position.| SIMMTECH vs. DB Insurance Co | SIMMTECH vs. Chin Yang Chemical | SIMMTECH vs. TK Chemical | SIMMTECH vs. Hanmi Semiconductor Co |
| ENERGYMACHINERY KOREA vs. Hwangkum Steel Technology | ENERGYMACHINERY KOREA vs. Heungkuk Metaltech CoLtd | ENERGYMACHINERY KOREA vs. LG Chemicals | ENERGYMACHINERY KOREA vs. Sung Bo Chemicals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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