Correlation Between Hyundai Engineering and Dongwoo Farm
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Dongwoo Farm 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 Dongwoo Farm 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 Dongwoo Farm To, you can compare the effects of market volatilities on Hyundai Engineering and Dongwoo Farm 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 Dongwoo Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Dongwoo Farm.
Diversification Opportunities for Hyundai Engineering and Dongwoo Farm
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hyundai and Dongwoo is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Constructi and Dongwoo Farm To in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoo Farm To 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 Dongwoo Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoo Farm To has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Dongwoo Farm go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Dongwoo Farm
Assuming the 90 days trading horizon Hyundai Engineering Construction is expected to generate 3.41 times more return on investment than Dongwoo Farm. However, Hyundai Engineering is 3.41 times more volatile than Dongwoo Farm To. It trades about 0.33 of its potential returns per unit of risk. Dongwoo Farm To is currently generating about -0.02 per unit of risk. If you would invest 2,585,000 in Hyundai Engineering Construction on November 4, 2024 and sell it today you would earn a total of 520,000 from holding Hyundai Engineering Construction or generate 20.12% 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. Dongwoo Farm To
Performance |
| Timeline |
| Hyundai Engineering |
| Dongwoo Farm To |
Hyundai Engineering and Dongwoo Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Dongwoo Farm
The main advantage of trading using opposite Hyundai Engineering and Dongwoo Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Dongwoo Farm 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 Dongwoo Farm will offset losses from the drop in Dongwoo Farm's long position.| Hyundai Engineering vs. Nable Communications | Hyundai Engineering vs. KB Financial Group | Hyundai Engineering vs. Mobileleader CoLtd | Hyundai Engineering vs. Incar Financial Service |
| Dongwoo Farm vs. Dongil Metal Co | Dongwoo Farm vs. Heungkuk Metaltech CoLtd | Dongwoo Farm vs. Daiyang Metal Co | Dongwoo Farm vs. Hanjoo Light Metal |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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