Correlation Between Echomarketing CoLtd and Samhwa Paint

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Can any of the company-specific risk be diversified away by investing in both Echomarketing CoLtd and Samhwa Paint 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 Echomarketing CoLtd and Samhwa Paint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Echomarketing CoLtd and Samhwa Paint Industrial, you can compare the effects of market volatilities on Echomarketing CoLtd and Samhwa Paint 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 Echomarketing CoLtd with a short position of Samhwa Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echomarketing CoLtd and Samhwa Paint.

Diversification Opportunities for Echomarketing CoLtd and Samhwa Paint

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Echomarketing and Samhwa is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Echomarketing CoLtd and Samhwa Paint Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhwa Paint Industrial and Echomarketing CoLtd 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 Echomarketing CoLtd are associated (or correlated) with Samhwa Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhwa Paint Industrial has no effect on the direction of Echomarketing CoLtd i.e., Echomarketing CoLtd and Samhwa Paint go up and down completely randomly.

Pair Corralation between Echomarketing CoLtd and Samhwa Paint

Assuming the 90 days trading horizon Echomarketing CoLtd is expected to generate 1.26 times more return on investment than Samhwa Paint. However, Echomarketing CoLtd is 1.26 times more volatile than Samhwa Paint Industrial. It trades about 0.01 of its potential returns per unit of risk. Samhwa Paint Industrial is currently generating about -0.08 per unit of risk. If you would invest  1,023,000  in Echomarketing CoLtd on October 3, 2024 and sell it today you would lose (14,000) from holding Echomarketing CoLtd or give up 1.37% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Echomarketing CoLtd  vs.  Samhwa Paint Industrial

 Performance 
       Timeline  
Echomarketing CoLtd 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Echomarketing CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Echomarketing CoLtd is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecDec20259,0009,50010,00010,50011,000
Samhwa Paint Industrial 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Samhwa Paint Industrial 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15NovDecDec20256,0006,5007,0007,500

Echomarketing CoLtd and Samhwa Paint Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Echomarketing CoLtd and Samhwa Paint

The main advantage of trading using opposite Echomarketing CoLtd and Samhwa Paint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echomarketing CoLtd position performs unexpectedly, Samhwa Paint 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 Samhwa Paint will offset losses from the drop in Samhwa Paint's long position.
The idea behind Echomarketing CoLtd and Samhwa Paint Industrial 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 CEOs Directory module to screen CEOs from public companies around the world.

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