Correlation Between Ecopro BM and Shin Heung
Can any of the company-specific risk be diversified away by investing in both Ecopro BM and Shin Heung 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 Ecopro BM and Shin Heung into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecopro BM Co and Shin Heung Energy, you can compare the effects of market volatilities on Ecopro BM and Shin Heung 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 Ecopro BM with a short position of Shin Heung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecopro BM and Shin Heung.
Diversification Opportunities for Ecopro BM and Shin Heung
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ecopro and Shin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ecopro BM Co and Shin Heung Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Heung Energy and Ecopro BM 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 Ecopro BM Co are associated (or correlated) with Shin Heung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Heung Energy has no effect on the direction of Ecopro BM i.e., Ecopro BM and Shin Heung go up and down completely randomly.
Pair Corralation between Ecopro BM and Shin Heung
Assuming the 90 days trading horizon Ecopro BM Co is expected to generate 1.3 times more return on investment than Shin Heung. However, Ecopro BM is 1.3 times more volatile than Shin Heung Energy. It trades about -0.21 of its potential returns per unit of risk. Shin Heung Energy is currently generating about -0.35 per unit of risk. If you would invest 17,200,000 in Ecopro BM Co on August 29, 2024 and sell it today you would lose (3,180,000) from holding Ecopro BM Co or give up 18.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecopro BM Co vs. Shin Heung Energy
Performance |
| Timeline |
| Ecopro BM |
| Shin Heung Energy |
Ecopro BM and Shin Heung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecopro BM and Shin Heung
The main advantage of trading using opposite Ecopro BM and Shin Heung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecopro BM position performs unexpectedly, Shin Heung 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 Shin Heung will offset losses from the drop in Shin Heung's long position.The idea behind Ecopro BM Co and Shin Heung Energy 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.| Shin Heung vs. Ecopro BM Co | Shin Heung vs. Sangsin Energy Display | Shin Heung vs. Bosung Power Technology | Shin Heung vs. APro 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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