Correlation Between QUALITAS SEMICONDUCTOR and Heungkuk Metaltech

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

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

Diversification Opportunities for QUALITAS SEMICONDUCTOR and Heungkuk Metaltech

0.63

Correlation Coefficient

QUALITAS SEMICONDUCTOR  Heungkuk Metaltech

Poor diversification

The 3 months correlation between QUALITAS and Heungkuk is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding QUALITAS SEMICONDUCTOR LTD 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 QUALITAS SEMICONDUCTOR 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 QUALITAS SEMICONDUCTOR LTD 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 QUALITAS SEMICONDUCTOR i.e., QUALITAS SEMICONDUCTOR and Heungkuk Metaltech go up and down completely randomly.

Pair Corralation between QUALITAS SEMICONDUCTOR and Heungkuk Metaltech

Assuming the 90 days trading horizon QUALITAS SEMICONDUCTOR LTD is expected to under-perform the Heungkuk Metaltech. In addition to that, QUALITAS SEMICONDUCTOR is 4.61 times more volatile than Heungkuk Metaltech CoLtd. It trades about -0.13 of its total potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about -0.05 per unit of volatility. If you would invest  494,500  in Heungkuk Metaltech CoLtd on September 2, 2024 and sell it today you would lose (14,500) from holding Heungkuk Metaltech CoLtd or give up 2.93% of portfolio value over 90 days.

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

QUALITAS SEMICONDUCTOR LTD  vs.  Heungkuk Metaltech CoLtd

QUALITAS SEMICONDUCTOR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QUALITAS SEMICONDUCTOR LTD 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

0 of 100

Very Weak

Over the last 90 days Heungkuk Metaltech CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Heungkuk Metaltech is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with QUALITAS SEMICONDUCTOR and Heungkuk Metaltech

The main advantage of trading using opposite QUALITAS SEMICONDUCTOR and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QUALITAS SEMICONDUCTOR 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 QUALITAS SEMICONDUCTOR LTD 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.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.