Correlation Between ASTORY CoLtd and Cheil Worldwide
Can any of the company-specific risk be diversified away by investing in both ASTORY CoLtd and Cheil Worldwide 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 ASTORY CoLtd and Cheil Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASTORY CoLtd and Cheil Worldwide, you can compare the effects of market volatilities on ASTORY CoLtd and Cheil Worldwide 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 ASTORY CoLtd with a short position of Cheil Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASTORY CoLtd and Cheil Worldwide.
Diversification Opportunities for ASTORY CoLtd and Cheil Worldwide
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASTORY and Cheil is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding ASTORY CoLtd and Cheil Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheil Worldwide and ASTORY CoLtd 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 ASTORY CoLtd are associated (or correlated) with Cheil Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheil Worldwide has no effect on the direction of ASTORY CoLtd i.e., ASTORY CoLtd and Cheil Worldwide go up and down completely randomly.
Pair Corralation between ASTORY CoLtd and Cheil Worldwide
Assuming the 90 days trading horizon ASTORY CoLtd is expected to generate 3.03 times more return on investment than Cheil Worldwide. However, ASTORY CoLtd is 3.03 times more volatile than Cheil Worldwide. It trades about 0.16 of its potential returns per unit of risk. Cheil Worldwide is currently generating about -0.03 per unit of risk. If you would invest 693,000 in ASTORY CoLtd on August 30, 2024 and sell it today you would earn a total of 50,000 from holding ASTORY CoLtd or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASTORY CoLtd vs. Cheil Worldwide
Performance |
| Timeline |
| ASTORY CoLtd |
| Cheil Worldwide |
ASTORY CoLtd and Cheil Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASTORY CoLtd and Cheil Worldwide
The main advantage of trading using opposite ASTORY CoLtd and Cheil Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASTORY CoLtd position performs unexpectedly, Cheil Worldwide 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 Cheil Worldwide will offset losses from the drop in Cheil Worldwide's long position.The idea behind ASTORY CoLtd and Cheil Worldwide 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.| Cheil Worldwide vs. Seoyon Topmetal Co | Cheil Worldwide vs. Innowireless Co | Cheil Worldwide vs. MetaLabs Co | Cheil Worldwide vs. PJ Metal Co |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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