Correlation Between Hyundai Engineering and Camus Engineering
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Camus Engineering 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 Camus Engineering 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 Camus Engineering Construction, you can compare the effects of market volatilities on Hyundai Engineering and Camus Engineering 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 Camus Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Camus Engineering.
Diversification Opportunities for Hyundai Engineering and Camus Engineering
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Camus is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Constructi and Camus Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camus Engineering 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 Camus Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camus Engineering has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Camus Engineering go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Camus Engineering
Assuming the 90 days trading horizon Hyundai Engineering Construction is expected to under-perform the Camus Engineering. In addition to that, Hyundai Engineering is 1.12 times more volatile than Camus Engineering Construction. It trades about -0.09 of its total potential returns per unit of risk. Camus Engineering Construction is currently generating about -0.07 per unit of volatility. If you would invest 148,493 in Camus Engineering Construction on August 29, 2024 and sell it today you would lose (20,593) from holding Camus Engineering Construction or give up 13.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Engineering Constructi vs. Camus Engineering Construction
Performance |
| Timeline |
| Hyundai Engineering |
| Camus Engineering |
Hyundai Engineering and Camus Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Camus Engineering
The main advantage of trading using opposite Hyundai Engineering and Camus Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Camus Engineering 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 Camus Engineering will offset losses from the drop in Camus Engineering's long position.| Hyundai Engineering vs. HJ ShipBuilding Construction | Hyundai Engineering vs. SEOJEON ELECTRIC MACHINERY | Hyundai Engineering vs. LG Household Healthcare | Hyundai Engineering vs. Seohee Construction Co |
| Camus Engineering vs. Coloray International Investment | Camus Engineering vs. Orbitech Co | Camus Engineering vs. Sangsangin Investment Securities | Camus Engineering vs. E Investment Development |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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