Correlation Between Clean Science and Heungkuk Metaltech

Can any of the company-specific risk be diversified away by investing in both Clean Science and Heungkuk Metaltech 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 Clean Science and Heungkuk Metaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clean Science co and Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on Clean Science and Heungkuk Metaltech 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 Clean Science with a short position of Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clean Science and Heungkuk Metaltech.

Diversification Opportunities for Clean Science and Heungkuk Metaltech

-0.22

Correlation Coefficient

Clean Science  Heungkuk Metaltech

Very good diversification

The 3 months correlation between Clean and Heungkuk is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Clean Science co and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd and Clean Science 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 Clean Science co are associated (or correlated) with Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of Clean Science i.e., Clean Science and Heungkuk Metaltech go up and down completely randomly.

Pair Corralation between Clean Science and Heungkuk Metaltech

Assuming the 90 days trading horizon Clean Science co is expected to under-perform the Heungkuk Metaltech. But the stock apears to be less risky and, when comparing its historical volatility, Clean Science co is 1.23 times less risky than Heungkuk Metaltech. The stock trades about -0.26 of its potential returns per unit of risk. The Heungkuk Metaltech CoLtd is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  471,500  in Heungkuk Metaltech CoLtd on September 12, 2024 and sell it today you would earn a total of  87,500  from holding Heungkuk Metaltech CoLtd or generate 18.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Clean Science co  vs.  Heungkuk Metaltech CoLtd

Clean Science co

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clean Science co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Heungkuk Metaltech CoLtd

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Heungkuk Metaltech CoLtd are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Heungkuk Metaltech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Clean Science and Heungkuk Metaltech

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

The idea behind Clean Science co and Heungkuk Metaltech 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.

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.