Correlation Between Coloray International and HYBE
Can any of the company-specific risk be diversified away by investing in both Coloray International and HYBE 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 Coloray International and HYBE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloray International Investment and HYBE Co, you can compare the effects of market volatilities on Coloray International and HYBE 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 Coloray International with a short position of HYBE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloray International and HYBE.
Diversification Opportunities for Coloray International and HYBE
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coloray and HYBE is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Coloray International Investme and HYBE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYBE and Coloray International 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 Coloray International Investment are associated (or correlated) with HYBE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYBE has no effect on the direction of Coloray International i.e., Coloray International and HYBE go up and down completely randomly.
Pair Corralation between Coloray International and HYBE
Assuming the 90 days trading horizon Coloray International is expected to generate 1.58 times less return on investment than HYBE. In addition to that, Coloray International is 1.07 times more volatile than HYBE Co. It trades about 0.05 of its total potential returns per unit of risk. HYBE Co is currently generating about 0.09 per unit of volatility. If you would invest 19,390,000 in HYBE Co on October 24, 2024 and sell it today you would earn a total of 2,410,000 from holding HYBE Co or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Coloray International Investme vs. HYBE Co
Performance |
| Timeline |
| Coloray International |
| HYBE |
Coloray International and HYBE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloray International and HYBE
The main advantage of trading using opposite Coloray International and HYBE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloray International position performs unexpectedly, HYBE 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 HYBE will offset losses from the drop in HYBE's long position.| Coloray International vs. Okins Electronics Co | Coloray International vs. KMH Hitech Co | Coloray International vs. Sungmoon Electronics Co | Coloray International vs. Cuckoo Electronics Co |
| HYBE vs. NH Investment Securities | HYBE vs. Coloray International Investment | HYBE vs. Choil Aluminum | HYBE vs. Daejung Chemicals Metals |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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