Correlation Between Hyundai Engineering and Wonil Special
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Wonil Special 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 Wonil Special 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 Wonil Special Steel, you can compare the effects of market volatilities on Hyundai Engineering and Wonil Special 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 Wonil Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Wonil Special.
Diversification Opportunities for Hyundai Engineering and Wonil Special
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hyundai and Wonil is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Constructi and Wonil Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonil Special Steel 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 Wonil Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonil Special Steel has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Wonil Special go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Wonil Special
Assuming the 90 days trading horizon Hyundai Engineering Construction is expected to generate 4.11 times more return on investment than Wonil Special. However, Hyundai Engineering is 4.11 times more volatile than Wonil Special Steel. It trades about 0.39 of its potential returns per unit of risk. Wonil Special Steel is currently generating about 0.17 per unit of risk. If you would invest 2,545,000 in Hyundai Engineering Construction on November 1, 2024 and sell it today you would earn a total of 605,000 from holding Hyundai Engineering Construction or generate 23.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Engineering Constructi vs. Wonil Special Steel
Performance |
| Timeline |
| Hyundai Engineering |
| Wonil Special Steel |
Hyundai Engineering and Wonil Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Wonil Special
The main advantage of trading using opposite Hyundai Engineering and Wonil Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Wonil Special 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 Wonil Special will offset losses from the drop in Wonil Special's long position.| Hyundai Engineering vs. National Plastic Co | Hyundai Engineering vs. Hana Materials | Hyundai Engineering vs. Dongbang Transport Logistics | Hyundai Engineering vs. LAKE MATERIALS LTD |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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