Correlation Between Hurum and Intops
Can any of the company-specific risk be diversified away by investing in both Hurum and Intops 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 Intops into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and Intops Co, you can compare the effects of market volatilities on Hurum and Intops 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 Intops. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and Intops.
Diversification Opportunities for Hurum and Intops
Very poor diversification
The 3 months correlation between Hurum and Intops is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and Intops Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intops 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 Intops. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intops has no effect on the direction of Hurum i.e., Hurum and Intops go up and down completely randomly.
Pair Corralation between Hurum and Intops
Assuming the 90 days trading horizon Hurum Co is expected to under-perform the Intops. But the stock apears to be less risky and, when comparing its historical volatility, Hurum Co is 1.2 times less risky than Intops. The stock trades about -0.1 of its potential returns per unit of risk. The Intops Co is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 2,679,565 in Intops Co on September 3, 2024 and sell it today you would lose (854,565) from holding Intops Co or give up 31.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. Intops Co
Performance |
| Timeline |
| Hurum |
| Intops |
Hurum and Intops Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and Intops
The main advantage of trading using opposite Hurum and Intops positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, Intops 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 Intops will offset losses from the drop in Intops' long position.| Hurum vs. Samhwa Paint Industrial | Hurum vs. EV Advanced Material | Hurum vs. Haesung Industrial Co | Hurum vs. Hyundai Industrial 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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