Correlation Between Hyundai Engineering and Hyunwoo Industrial
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Hyunwoo Industrial 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 Hyunwoo Industrial 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 Hyunwoo Industrial Co, you can compare the effects of market volatilities on Hyundai Engineering and Hyunwoo Industrial 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 Hyunwoo Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Hyunwoo Industrial.
Diversification Opportunities for Hyundai Engineering and Hyunwoo Industrial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Hyunwoo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Constructi and Hyunwoo Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyunwoo Industrial 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 Hyunwoo Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyunwoo Industrial has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Hyunwoo Industrial go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Hyunwoo Industrial
Assuming the 90 days trading horizon Hyundai Engineering Construction is expected to generate 0.75 times more return on investment than Hyunwoo Industrial. However, Hyundai Engineering Construction is 1.33 times less risky than Hyunwoo Industrial. It trades about -0.03 of its potential returns per unit of risk. Hyunwoo Industrial Co is currently generating about -0.04 per unit of risk. If you would invest 3,698,754 in Hyundai Engineering Construction on October 13, 2024 and sell it today you would lose (1,033,754) from holding Hyundai Engineering Construction or give up 27.95% 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. Hyunwoo Industrial Co
Performance |
| Timeline |
| Hyundai Engineering |
| Hyunwoo Industrial |
Hyundai Engineering and Hyunwoo Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Hyunwoo Industrial
The main advantage of trading using opposite Hyundai Engineering and Hyunwoo Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Hyunwoo Industrial 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 Hyunwoo Industrial will offset losses from the drop in Hyunwoo Industrial's long position.| Hyundai Engineering vs. Kakao Games Corp | Hyundai Engineering vs. Dong A Steel Technology | Hyundai Engineering vs. DB Insurance Co | Hyundai Engineering vs. Lotte Data Communication |
| Hyunwoo Industrial vs. Lotte Data Communication | Hyunwoo Industrial vs. CG Hi Tech | Hyunwoo Industrial vs. Hyundai Engineering Construction | Hyunwoo Industrial vs. Nam Hwa Construction |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stocks Directory Find actively traded stocks across global markets |