Correlation Between PH Tech and Cheryong Industrial
Can any of the company-specific risk be diversified away by investing in both PH Tech and Cheryong Industrial 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 Cheryong Industrial 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 Cheryong Industrial CoLtd, you can compare the effects of market volatilities on PH Tech and Cheryong Industrial 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 Cheryong Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PH Tech and Cheryong Industrial.
Diversification Opportunities for PH Tech and Cheryong Industrial
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 239890 and Cheryong is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding PH Tech Co and Cheryong Industrial CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheryong Industrial CoLtd 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 Cheryong Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheryong Industrial CoLtd has no effect on the direction of PH Tech i.e., PH Tech and Cheryong Industrial go up and down completely randomly.
Pair Corralation between PH Tech and Cheryong Industrial
Assuming the 90 days trading horizon PH Tech Co is expected to under-perform the Cheryong Industrial. In addition to that, PH Tech is 1.08 times more volatile than Cheryong Industrial CoLtd. It trades about -0.13 of its total potential returns per unit of risk. Cheryong Industrial CoLtd is currently generating about -0.09 per unit of volatility. If you would invest 892,000 in Cheryong Industrial CoLtd on September 21, 2024 and sell it today you would lose (317,000) from holding Cheryong Industrial CoLtd or give up 35.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PH Tech Co vs. Cheryong Industrial CoLtd
Performance |
| Timeline |
| PH Tech |
| Cheryong Industrial CoLtd |
PH Tech and Cheryong Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PH Tech and Cheryong Industrial
The main advantage of trading using opposite PH Tech and Cheryong Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PH Tech position performs unexpectedly, Cheryong Industrial 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 Cheryong Industrial will offset losses from the drop in Cheryong Industrial's long position.The idea behind PH Tech Co and Cheryong Industrial CoLtd 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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