Correlation Between Hyundai Engineering and Eagle Veterinary
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Eagle Veterinary 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 Eagle Veterinary 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 Eagle Veterinary Technology, you can compare the effects of market volatilities on Hyundai Engineering and Eagle Veterinary 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 Eagle Veterinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Eagle Veterinary.
Diversification Opportunities for Hyundai Engineering and Eagle Veterinary
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Eagle is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Constructi and Eagle Veterinary Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Veterinary Tec 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 Eagle Veterinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Veterinary Tec has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Eagle Veterinary go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Eagle Veterinary
Assuming the 90 days trading horizon Hyundai Engineering Construction is expected to under-perform the Eagle Veterinary. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Engineering Construction is 1.02 times less risky than Eagle Veterinary. The stock trades about -0.19 of its potential returns per unit of risk. The Eagle Veterinary Technology is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 480,000 in Eagle Veterinary Technology on September 13, 2024 and sell it today you would lose (19,500) from holding Eagle Veterinary Technology or give up 4.06% 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. Eagle Veterinary Technology
Performance |
| Timeline |
| Hyundai Engineering |
| Eagle Veterinary Tec |
Hyundai Engineering and Eagle Veterinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Eagle Veterinary
The main advantage of trading using opposite Hyundai Engineering and Eagle Veterinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Eagle Veterinary 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 Eagle Veterinary will offset losses from the drop in Eagle Veterinary's long position.| Hyundai Engineering vs. Sempio Foods Co | Hyundai Engineering vs. Kumho Industrial Co | Hyundai Engineering vs. Formetal Co | Hyundai Engineering vs. Hyundai Green Food |
| Eagle Veterinary vs. Kolon Life Science | Eagle Veterinary vs. JETEMA Co | Eagle Veterinary vs. Aminologics CoLtd | Eagle Veterinary vs. HLB Pharmaceutical Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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