Correlation Between Camus Engineering and ENERGYMACHINERY KOREA

Can any of the company-specific risk be diversified away by investing in both Camus Engineering and ENERGYMACHINERY 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 Camus Engineering and ENERGYMACHINERY KOREA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Camus Engineering Construction and ENERGYMACHINERY KOREA CoLtd, you can compare the effects of market volatilities on Camus Engineering and ENERGYMACHINERY 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 Camus Engineering with a short position of ENERGYMACHINERY KOREA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camus Engineering and ENERGYMACHINERY KOREA.

Diversification Opportunities for Camus Engineering and ENERGYMACHINERY KOREA

0.37

Correlation Coefficient

Camus Engineering  ENERGYMACHINERY KOREA

Weak diversification

The 3 months correlation between Camus and ENERGYMACHINERY is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Camus Engineering Construction and ENERGYMACHINERY KOREA CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENERGYMACHINERY KOREA and Camus Engineering 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 Camus Engineering Construction are associated (or correlated) with ENERGYMACHINERY KOREA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENERGYMACHINERY KOREA has no effect on the direction of Camus Engineering i.e., Camus Engineering and ENERGYMACHINERY KOREA go up and down completely randomly.

Pair Corralation between Camus Engineering and ENERGYMACHINERY KOREA

Assuming the 90 days trading horizon Camus Engineering Construction is expected to generate 1.18 times more return on investment than ENERGYMACHINERY KOREA. However, Camus Engineering is 1.18 times more volatile than ENERGYMACHINERY KOREA CoLtd. It trades about 0.17 of its potential returns per unit of risk. ENERGYMACHINERY KOREA CoLtd is currently generating about -0.09 per unit of risk. If you would invest  122,900  in Camus Engineering Construction on September 18, 2024 and sell it today you would earn a total of  14,200  from holding Camus Engineering Construction or generate 11.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Camus Engineering Construction  vs.  ENERGYMACHINERY KOREA CoLtd

Camus Engineering

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Camus Engineering Construction are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Camus Engineering is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ENERGYMACHINERY KOREA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENERGYMACHINERY KOREA CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Camus Engineering and ENERGYMACHINERY KOREA

The main advantage of trading using opposite Camus Engineering and ENERGYMACHINERY KOREA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camus Engineering position performs unexpectedly, ENERGYMACHINERY 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 ENERGYMACHINERY KOREA will offset losses from the drop in ENERGYMACHINERY KOREA's long position.

The idea behind Camus Engineering Construction and ENERGYMACHINERY KOREA CoLtd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..