Correlation Between HJ ShipBuilding and WooDeumGee Farm

Can any of the company-specific risk be diversified away by investing in both HJ ShipBuilding and WooDeumGee Farm 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 HJ ShipBuilding and WooDeumGee Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HJ ShipBuilding Construction and WooDeumGee Farm Co,, you can compare the effects of market volatilities on HJ ShipBuilding and WooDeumGee Farm 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 HJ ShipBuilding with a short position of WooDeumGee Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of HJ ShipBuilding and WooDeumGee Farm.

Diversification Opportunities for HJ ShipBuilding and WooDeumGee Farm

-0.23

Correlation Coefficient

HJ ShipBuilding  WooDeumGee Farm

Very good diversification

The 3 months correlation between 097230 and WooDeumGee is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding HJ ShipBuilding Construction and WooDeumGee Farm Co, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WooDeumGee Farm Co, and HJ ShipBuilding 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 HJ ShipBuilding Construction are associated (or correlated) with WooDeumGee Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WooDeumGee Farm Co, has no effect on the direction of HJ ShipBuilding i.e., HJ ShipBuilding and WooDeumGee Farm go up and down completely randomly.

Pair Corralation between HJ ShipBuilding and WooDeumGee Farm

Assuming the 90 days trading horizon HJ ShipBuilding Construction is expected to generate 4.5 times more return on investment than WooDeumGee Farm. However, HJ ShipBuilding is 4.5 times more volatile than WooDeumGee Farm Co,. It trades about 0.53 of its potential returns per unit of risk. WooDeumGee Farm Co, is currently generating about -0.16 per unit of risk. If you would invest  222,000  in HJ ShipBuilding Construction on August 31, 2024 and sell it today you would earn a total of  226,000  from holding HJ ShipBuilding Construction or generate 101.8% return on investment over 90 days.

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

HJ ShipBuilding Construction  vs.  WooDeumGee Farm Co,

HJ ShipBuilding Cons

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HJ ShipBuilding Construction are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HJ ShipBuilding sustained solid returns over the last few months and may actually be approaching a breakup point.

WooDeumGee Farm Co,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WooDeumGee Farm 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 December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with HJ ShipBuilding and WooDeumGee Farm

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

The idea behind HJ ShipBuilding Construction and WooDeumGee Farm Co, 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.