Correlation Between PH Tech and Kyeryong Construction
Can any of the company-specific risk be diversified away by investing in both PH Tech and Kyeryong Construction 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 PH Tech and Kyeryong Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PH Tech Co and Kyeryong Construction Industrial, you can compare the effects of market volatilities on PH Tech and Kyeryong Construction 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 PH Tech with a short position of Kyeryong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of PH Tech and Kyeryong Construction.
Diversification Opportunities for PH Tech and Kyeryong Construction
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 239890 and Kyeryong is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding PH Tech Co and Kyeryong Construction Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyeryong Construction and PH Tech 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 PH Tech Co are associated (or correlated) with Kyeryong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyeryong Construction has no effect on the direction of PH Tech i.e., PH Tech and Kyeryong Construction go up and down completely randomly.
Pair Corralation between PH Tech and Kyeryong Construction
Assuming the 90 days trading horizon PH Tech Co is expected to under-perform the Kyeryong Construction. In addition to that, PH Tech is 2.56 times more volatile than Kyeryong Construction Industrial. It trades about -0.13 of its total potential returns per unit of risk. Kyeryong Construction Industrial is currently generating about -0.06 per unit of volatility. If you would invest 1,471,000 in Kyeryong Construction Industrial on September 21, 2024 and sell it today you would lose (152,000) from holding Kyeryong Construction Industrial or give up 10.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PH Tech Co vs. Kyeryong Construction Industri
Performance |
| Timeline |
| PH Tech |
| Kyeryong Construction |
PH Tech and Kyeryong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PH Tech and Kyeryong Construction
The main advantage of trading using opposite PH Tech and Kyeryong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PH Tech position performs unexpectedly, Kyeryong Construction 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 Kyeryong Construction will offset losses from the drop in Kyeryong Construction's long position.The idea behind PH Tech Co and Kyeryong Construction Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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