Correlation Between Eugene Investment and ENERGYMACHINERY KOREA

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

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

Diversification Opportunities for Eugene Investment and ENERGYMACHINERY KOREA

0.42

Correlation Coefficient

Eugene Investment  ENERGYMACHINERY KOREA

Very weak diversification

The 3 months correlation between Eugene and ENERGYMACHINERY is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Eugene Investment Securities and ENERGYMACHINERY KOREA CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENERGYMACHINERY KOREA and Eugene 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 Eugene Investment Securities are associated (or correlated) with ENERGYMACHINERY KOREA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENERGYMACHINERY KOREA has no effect on the direction of Eugene Investment i.e., Eugene Investment and ENERGYMACHINERY KOREA go up and down completely randomly.

Pair Corralation between Eugene Investment and ENERGYMACHINERY KOREA

Assuming the 90 days trading horizon Eugene Investment Securities is expected to generate 1.75 times more return on investment than ENERGYMACHINERY KOREA. However, Eugene Investment is 1.75 times more volatile than ENERGYMACHINERY KOREA CoLtd. It trades about 0.19 of its potential returns per unit of risk. ENERGYMACHINERY KOREA CoLtd is currently generating about 0.0 per unit of risk. If you would invest  261,500  in Eugene Investment Securities on April 24, 2025 and sell it today you would earn a total of  116,500  from holding Eugene Investment Securities or generate 44.55% return on investment over 90 days.

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

Eugene Investment Securities  vs.  ENERGYMACHINERY KOREA CoLtd

Eugene Investment

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eugene Investment Securities are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Eugene Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

ENERGYMACHINERY KOREA

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Eugene Investment and ENERGYMACHINERY KOREA

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

The idea behind Eugene Investment Securities and ENERGYMACHINERY KOREA 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.