Correlation Between EBEST Investment and Korea Shipbuilding

Can any of the company-specific risk be diversified away by investing in both EBEST Investment and Korea Shipbuilding 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 EBEST Investment and Korea Shipbuilding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EBEST Investment Securities and Korea Shipbuilding Offshore, you can compare the effects of market volatilities on EBEST Investment and Korea Shipbuilding 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 EBEST Investment with a short position of Korea Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Korea Shipbuilding.

Diversification Opportunities for EBEST Investment and Korea Shipbuilding

0.2

Correlation Coefficient

EBEST Investment  Korea Shipbuilding

Modest diversification

The 3 months correlation between EBEST and Korea is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Korea Shipbuilding Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Shipbuilding and EBEST Investment 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 EBEST Investment Securities are associated (or correlated) with Korea Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Shipbuilding has no effect on the direction of EBEST Investment i.e., EBEST Investment and Korea Shipbuilding go up and down completely randomly.

Pair Corralation between EBEST Investment and Korea Shipbuilding

Assuming the 90 days trading horizon EBEST Investment Securities is expected to generate 0.43 times more return on investment than Korea Shipbuilding. However, EBEST Investment Securities is 2.32 times less risky than Korea Shipbuilding. It trades about 0.04 of its potential returns per unit of risk. Korea Shipbuilding Offshore is currently generating about -0.04 per unit of risk. If you would invest  364,473  in EBEST Investment Securities on December 31, 2024 and sell it today you would earn a total of  9,027  from holding EBEST Investment Securities or generate 2.48% return on investment over 90 days.

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

EBEST Investment Securities  vs.  Korea Shipbuilding Offshore

EBEST Investment Sec

Risk-Adjusted Performance

Very Weak

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

Korea Shipbuilding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Korea Shipbuilding Offshore 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 EBEST Investment and Korea Shipbuilding

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

The idea behind EBEST Investment Securities and Korea Shipbuilding Offshore 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.