Correlation Between Hyundai Engineering and Techwing
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Techwing 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 Techwing 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 Techwing, you can compare the effects of market volatilities on Hyundai Engineering and Techwing 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 Techwing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Techwing.
Diversification Opportunities for Hyundai Engineering and Techwing
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hyundai and Techwing is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Constructi and Techwing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techwing 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 Techwing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techwing has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Techwing go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Techwing
Assuming the 90 days trading horizon Hyundai Engineering is expected to generate 2.94 times less return on investment than Techwing. But when comparing it to its historical volatility, Hyundai Engineering Construction is 1.77 times less risky than Techwing. It trades about 0.11 of its potential returns per unit of risk. Techwing is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,605,000 in Techwing on October 28, 2024 and sell it today you would earn a total of 1,345,000 from holding Techwing or generate 37.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Engineering Constructi vs. Techwing
Performance |
| Timeline |
| Hyundai Engineering |
| Techwing |
Hyundai Engineering and Techwing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Techwing
The main advantage of trading using opposite Hyundai Engineering and Techwing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Techwing 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 Techwing will offset losses from the drop in Techwing's long position.| Hyundai Engineering vs. Lion Chemtech Co | Hyundai Engineering vs. Handok Clean Tech | Hyundai Engineering vs. Haitai Confectionery Foods | Hyundai Engineering vs. SS TECH |
| Techwing vs. Korea Information Engineering | Techwing vs. FoodNamoo | Techwing vs. Haitai Confectionery Foods | Techwing vs. Insung Information 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |