Correlation Between FrontView REIT, and Cheryong Electric

Can any of the company-specific risk be diversified away by investing in both FrontView REIT, and Cheryong Electric 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 FrontView REIT, and Cheryong Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FrontView REIT, and Cheryong Electric CoLtd, you can compare the effects of market volatilities on FrontView REIT, and Cheryong Electric 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 FrontView REIT, with a short position of Cheryong Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of FrontView REIT, and Cheryong Electric.

Diversification Opportunities for FrontView REIT, and Cheryong Electric

-0.38

Correlation Coefficient

FrontView REIT,  Cheryong Electric

Very good diversification

The 3 months correlation between FrontView and Cheryong is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, and Cheryong Electric CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheryong Electric CoLtd and FrontView REIT, 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 FrontView REIT, are associated (or correlated) with Cheryong Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheryong Electric CoLtd has no effect on the direction of FrontView REIT, i.e., FrontView REIT, and Cheryong Electric go up and down completely randomly.

Pair Corralation between FrontView REIT, and Cheryong Electric

Considering the 90-day investment horizon FrontView REIT, is expected to generate 0.29 times more return on investment than Cheryong Electric. However, FrontView REIT, is 3.49 times less risky than Cheryong Electric. It trades about -0.04 of its potential returns per unit of risk. Cheryong Electric CoLtd is currently generating about -0.08 per unit of risk. If you would invest  1,900  in FrontView REIT, on September 23, 2024 and sell it today you would lose (77.00) from holding FrontView REIT, or give up 4.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	47.97%
Values	Daily Returns

FrontView REIT,  vs.  Cheryong Electric CoLtd

FrontView REIT,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FrontView REIT, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, FrontView REIT, is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Cheryong Electric CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cheryong Electric CoLtd 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.

Pair Trading with FrontView REIT, and Cheryong Electric

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

The idea behind FrontView REIT, and Cheryong Electric 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.