Correlation Between CU Tech and Cosmecca Korea
Can any of the company-specific risk be diversified away by investing in both CU Tech and Cosmecca Korea 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 CU Tech and Cosmecca Korea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CU Tech Corp and Cosmecca Korea Co, you can compare the effects of market volatilities on CU Tech and Cosmecca Korea 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 CU Tech with a short position of Cosmecca Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Tech and Cosmecca Korea.
Diversification Opportunities for CU Tech and Cosmecca Korea
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 376290 and Cosmecca is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CU Tech Corp and Cosmecca Korea Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmecca Korea and CU Tech 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 CU Tech Corp are associated (or correlated) with Cosmecca Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmecca Korea has no effect on the direction of CU Tech i.e., CU Tech and Cosmecca Korea go up and down completely randomly.
Pair Corralation between CU Tech and Cosmecca Korea
Assuming the 90 days trading horizon CU Tech Corp is expected to under-perform the Cosmecca Korea. But the stock apears to be less risky and, when comparing its historical volatility, CU Tech Corp is 2.09 times less risky than Cosmecca Korea. The stock trades about -0.03 of its potential returns per unit of risk. The Cosmecca Korea Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 919,000 in Cosmecca Korea Co on September 5, 2024 and sell it today you would earn a total of 4,491,000 from holding Cosmecca Korea Co or generate 488.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CU Tech Corp vs. Cosmecca Korea Co
Performance |
| Timeline |
| CU Tech Corp |
| Cosmecca Korea |
CU Tech and Cosmecca Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CU Tech and Cosmecca Korea
The main advantage of trading using opposite CU Tech and Cosmecca Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CU Tech position performs unexpectedly, Cosmecca Korea 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 Cosmecca Korea will offset losses from the drop in Cosmecca Korea's long position.| CU Tech vs. SK Hynix | CU Tech vs. LX Semicon Co | CU Tech vs. Tokai Carbon Korea | CU Tech vs. People Technology |
| Cosmecca Korea vs. SS TECH | Cosmecca Korea vs. Intellian Technologies | Cosmecca Korea vs. Eagle Veterinary Technology | Cosmecca Korea vs. CU Tech Corp |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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