Correlation Between Hurum and Asia Economy
Can any of the company-specific risk be diversified away by investing in both Hurum and Asia Economy 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 Asia Economy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and Asia Economy Daily, you can compare the effects of market volatilities on Hurum and Asia Economy 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 Asia Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and Asia Economy.
Diversification Opportunities for Hurum and Asia Economy
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hurum and Asia is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and Asia Economy Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Economy Daily 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 Asia Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Economy Daily has no effect on the direction of Hurum i.e., Hurum and Asia Economy go up and down completely randomly.
Pair Corralation between Hurum and Asia Economy
Assuming the 90 days trading horizon Hurum Co is expected to under-perform the Asia Economy. But the stock apears to be less risky and, when comparing its historical volatility, Hurum Co is 1.25 times less risky than Asia Economy. The stock trades about -0.01 of its potential returns per unit of risk. The Asia Economy Daily is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 130,000 in Asia Economy Daily on October 24, 2024 and sell it today you would earn a total of 41,500 from holding Asia Economy Daily or generate 31.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Hurum Co vs. Asia Economy Daily
Performance |
| Timeline |
| Hurum |
| Asia Economy Daily |
Hurum and Asia Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and Asia Economy
The main advantage of trading using opposite Hurum and Asia Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, Asia Economy 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 Asia Economy will offset losses from the drop in Asia Economy's long position.| Hurum vs. Tamul Multimedia Co | Hurum vs. Hanwha Life Insurance | Hurum vs. Daewon Media Co | Hurum vs. DC Media Co |
| Asia Economy vs. Seoyon Topmetal Co | Asia Economy vs. Koryo Credit Information | Asia Economy vs. GS Retail Co | Asia Economy vs. Korea Information Engineering |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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