Correlation Between Hurum and Myoung Shin
Can any of the company-specific risk be diversified away by investing in both Hurum and Myoung Shin 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 Hurum and Myoung Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and Myoung Shin Industrial, you can compare the effects of market volatilities on Hurum and Myoung Shin 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 Hurum with a short position of Myoung Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and Myoung Shin.
Diversification Opportunities for Hurum and Myoung Shin
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hurum and Myoung is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and Myoung Shin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myoung Shin Industrial and Hurum 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 Hurum Co are associated (or correlated) with Myoung Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myoung Shin Industrial has no effect on the direction of Hurum i.e., Hurum and Myoung Shin go up and down completely randomly.
Pair Corralation between Hurum and Myoung Shin
Assuming the 90 days trading horizon Hurum Co is expected to generate 0.91 times more return on investment than Myoung Shin. However, Hurum Co is 1.1 times less risky than Myoung Shin. It trades about -0.04 of its potential returns per unit of risk. Myoung Shin Industrial is currently generating about -0.06 per unit of risk. If you would invest 103,300 in Hurum Co on November 3, 2024 and sell it today you would lose (28,200) from holding Hurum Co or give up 27.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Hurum Co vs. Myoung Shin Industrial
Performance |
| Timeline |
| Hurum |
| Myoung Shin Industrial |
Hurum and Myoung Shin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and Myoung Shin
The main advantage of trading using opposite Hurum and Myoung Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, Myoung Shin 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 Myoung Shin will offset losses from the drop in Myoung Shin's long position.| Hurum vs. Dongil Metal Co | Hurum vs. Daesung Hi Tech Co | Hurum vs. Daejung Chemicals Metals | Hurum vs. Korea Computer |
| Myoung Shin vs. Seohee Construction Co | Myoung Shin vs. Lotte Data Communication | Myoung Shin vs. Mobile Appliance | Myoung Shin vs. Shinsegae Engineering Construction |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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