Correlation Between CU Tech and Osang Healthcare

Can any of the company-specific risk be diversified away by investing in both CU Tech and Osang Healthcare 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 CU Tech and Osang Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CU Tech Corp and Osang Healthcare Co,Ltd, you can compare the effects of market volatilities on CU Tech and Osang Healthcare 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 CU Tech with a short position of Osang Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Tech and Osang Healthcare.

Diversification Opportunities for CU Tech and Osang Healthcare

0.86

Correlation Coefficient

CU Tech  Osang Healthcare

Very poor diversification

The 3 months correlation between 376290 and Osang is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding CU Tech Corp and Osang Healthcare Co,Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osang Healthcare Co,Ltd and CU Tech 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 CU Tech Corp are associated (or correlated) with Osang Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osang Healthcare Co,Ltd has no effect on the direction of CU Tech i.e., CU Tech and Osang Healthcare go up and down completely randomly.

Pair Corralation between CU Tech and Osang Healthcare

Assuming the 90 days trading horizon CU Tech Corp is expected to generate 0.54 times more return on investment than Osang Healthcare. However, CU Tech Corp is 1.86 times less risky than Osang Healthcare. It trades about -0.1 of its potential returns per unit of risk. Osang Healthcare Co,Ltd is currently generating about -0.07 per unit of risk. If you would invest  313,000  in CU Tech Corp on September 14, 2024 and sell it today you would lose (25,000) from holding CU Tech Corp or give up 7.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.31%
Values	Daily Returns

CU Tech Corp  vs.  Osang Healthcare Co,Ltd

CU Tech Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CU Tech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Osang Healthcare Co,Ltd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Osang Healthcare Co,Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with CU Tech and Osang Healthcare

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

The idea behind CU Tech Corp and Osang Healthcare Co,Ltd 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.