Correlation Between Pureun Mutual and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both Pureun Mutual and Hanjoo Light 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 Pureun Mutual and Hanjoo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pureun Mutual Savings and Hanjoo Light Metal, you can compare the effects of market volatilities on Pureun Mutual and Hanjoo Light 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 Pureun Mutual with a short position of Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pureun Mutual and Hanjoo Light.
Diversification Opportunities for Pureun Mutual and Hanjoo Light
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pureun and Hanjoo is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pureun Mutual Savings and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal and Pureun Mutual 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 Pureun Mutual Savings are associated (or correlated) with Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of Pureun Mutual i.e., Pureun Mutual and Hanjoo Light go up and down completely randomly.
Pair Corralation between Pureun Mutual and Hanjoo Light
Assuming the 90 days trading horizon Pureun Mutual Savings is expected to generate 1.13 times more return on investment than Hanjoo Light. However, Pureun Mutual is 1.13 times more volatile than Hanjoo Light Metal. It trades about 0.03 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.13 per unit of risk. If you would invest 799,903 in Pureun Mutual Savings on November 18, 2024 and sell it today you would earn a total of 18,097 from holding Pureun Mutual Savings or generate 2.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Pureun Mutual Savings vs. Hanjoo Light Metal
Performance |
Timeline |
Pureun Mutual Savings |
Hanjoo Light Metal |
Pureun Mutual and Hanjoo Light Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pureun Mutual and Hanjoo Light
The main advantage of trading using opposite Pureun Mutual and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pureun Mutual position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light's long position.Pureun Mutual vs. KB Financial Group | ||
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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