Correlation Between Organic Special and Pungguk Ethanol
Can any of the company-specific risk be diversified away by investing in both Organic Special and Pungguk Ethanol 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 Organic Special and Pungguk Ethanol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Organic Special Pet and Pungguk Ethanol Industrial, you can compare the effects of market volatilities on Organic Special and Pungguk Ethanol 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 Organic Special with a short position of Pungguk Ethanol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Organic Special and Pungguk Ethanol.
Diversification Opportunities for Organic Special and Pungguk Ethanol
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Organic and Pungguk is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Organic Special Pet and Pungguk Ethanol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pungguk Ethanol Indu and Organic Special 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 Organic Special Pet are associated (or correlated) with Pungguk Ethanol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pungguk Ethanol Indu has no effect on the direction of Organic Special i.e., Organic Special and Pungguk Ethanol go up and down completely randomly.
Pair Corralation between Organic Special and Pungguk Ethanol
Assuming the 90 days trading horizon Organic Special Pet is expected to under-perform the Pungguk Ethanol. In addition to that, Organic Special is 3.2 times more volatile than Pungguk Ethanol Industrial. It trades about -0.23 of its total potential returns per unit of risk. Pungguk Ethanol Industrial is currently generating about -0.27 per unit of volatility. If you would invest 1,014,000 in Pungguk Ethanol Industrial on September 5, 2024 and sell it today you would lose (40,000) from holding Pungguk Ethanol Industrial or give up 3.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Organic Special Pet vs. Pungguk Ethanol Industrial
Performance |
| Timeline |
| Organic Special Pet |
| Pungguk Ethanol Indu |
Organic Special and Pungguk Ethanol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Organic Special and Pungguk Ethanol
The main advantage of trading using opposite Organic Special and Pungguk Ethanol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Organic Special position performs unexpectedly, Pungguk Ethanol 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 Pungguk Ethanol will offset losses from the drop in Pungguk Ethanol's long position.| Organic Special vs. Samsung Electronics Co | Organic Special vs. Samsung Electronics Co | Organic Special vs. LG Energy Solution | Organic Special vs. SK Hynix |
| Pungguk Ethanol vs. SBI Investment KOREA | Pungguk Ethanol vs. Organic Special Pet | Pungguk Ethanol vs. Shinsegae Food | Pungguk Ethanol vs. CKH Food Health |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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