Correlation Between Hyundai Engineering and NH Investment
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and NH Investment 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 Hyundai Engineering and NH Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Engineering Construction and NH Investment Securities, you can compare the effects of market volatilities on Hyundai Engineering and NH Investment 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 Hyundai Engineering with a short position of NH Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and NH Investment.
Diversification Opportunities for Hyundai Engineering and NH Investment
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and 005940 is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Constructi and NH Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH Investment Securities and Hyundai Engineering 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 Hyundai Engineering Construction are associated (or correlated) with NH Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH Investment Securities has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and NH Investment go up and down completely randomly.
Pair Corralation between Hyundai Engineering and NH Investment
Assuming the 90 days trading horizon Hyundai Engineering Construction is expected to generate 1.14 times more return on investment than NH Investment. However, Hyundai Engineering is 1.14 times more volatile than NH Investment Securities. It trades about 0.02 of its potential returns per unit of risk. NH Investment Securities is currently generating about -0.04 per unit of risk. If you would invest 2,580,000 in Hyundai Engineering Construction on October 18, 2024 and sell it today you would earn a total of 10,000 from holding Hyundai Engineering Construction or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Engineering Constructi vs. NH Investment Securities
Performance |
| Timeline |
| Hyundai Engineering |
| NH Investment Securities |
Hyundai Engineering and NH Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and NH Investment
The main advantage of trading using opposite Hyundai Engineering and NH Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, NH Investment 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 NH Investment will offset losses from the drop in NH Investment's long position.| Hyundai Engineering vs. TK Chemical | Hyundai Engineering vs. Sangsin Energy Display | Hyundai Engineering vs. KPX Green Chemical | Hyundai Engineering vs. Hanil Chemical Ind |
| NH Investment vs. Woorim Machinery Co | NH Investment vs. SEOJEON ELECTRIC MACHINERY | NH Investment vs. Hyundai Engineering Construction | NH Investment vs. LG Household Healthcare |
Check out your portfolio center.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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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