Correlation Between Hyundai Engineering and Taegu Broadcasting
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Taegu Broadcasting 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 Taegu Broadcasting 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 Taegu Broadcasting, you can compare the effects of market volatilities on Hyundai Engineering and Taegu Broadcasting 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 Taegu Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Taegu Broadcasting.
Diversification Opportunities for Hyundai Engineering and Taegu Broadcasting
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Taegu is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Constructi and Taegu Broadcasting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taegu Broadcasting 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 Taegu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taegu Broadcasting has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Taegu Broadcasting go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Taegu Broadcasting
Assuming the 90 days trading horizon Hyundai Engineering Construction is expected to generate 1.16 times more return on investment than Taegu Broadcasting. However, Hyundai Engineering is 1.16 times more volatile than Taegu Broadcasting. It trades about -0.01 of its potential returns per unit of risk. Taegu Broadcasting is currently generating about -0.02 per unit of risk. If you would invest 3,625,073 in Hyundai Engineering Construction on October 30, 2024 and sell it today you would lose (475,073) from holding Hyundai Engineering Construction or give up 13.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Engineering Constructi vs. Taegu Broadcasting
Performance |
| Timeline |
| Hyundai Engineering |
| Taegu Broadcasting |
Hyundai Engineering and Taegu Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Taegu Broadcasting
The main advantage of trading using opposite Hyundai Engineering and Taegu Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Taegu Broadcasting 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 Taegu Broadcasting will offset losses from the drop in Taegu Broadcasting's long position.| Hyundai Engineering vs. CKH Food Health | Hyundai Engineering vs. Samyang Foods Co | Hyundai Engineering vs. Sempio Foods Co | Hyundai Engineering vs. Nam Hwa Construction |
| Taegu Broadcasting vs. Busan Industrial Co | Taegu Broadcasting vs. Busan Ind | Taegu Broadcasting vs. RPBio Inc | Taegu Broadcasting vs. Finebesteel |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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