Correlation Between Hyundai Engineering and Dongkuk Structures
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Dongkuk Structures 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 Dongkuk Structures 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 Dongkuk Structures Construction, you can compare the effects of market volatilities on Hyundai Engineering and Dongkuk Structures 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 Dongkuk Structures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Dongkuk Structures.
Diversification Opportunities for Hyundai Engineering and Dongkuk Structures
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hyundai and Dongkuk is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Constructi and Dongkuk Structures Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongkuk Structures 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 Dongkuk Structures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongkuk Structures has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Dongkuk Structures go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Dongkuk Structures
Assuming the 90 days trading horizon Hyundai Engineering is expected to generate 2.96 times less return on investment than Dongkuk Structures. But when comparing it to its historical volatility, Hyundai Engineering Construction is 1.26 times less risky than Dongkuk Structures. It trades about 0.06 of its potential returns per unit of risk. Dongkuk Structures Construction is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 237,000 in Dongkuk Structures Construction on October 14, 2024 and sell it today you would earn a total of 13,000 from holding Dongkuk Structures Construction or generate 5.49% 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. Dongkuk Structures Constructio
Performance |
| Timeline |
| Hyundai Engineering |
| Dongkuk Structures |
Hyundai Engineering and Dongkuk Structures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Dongkuk Structures
The main advantage of trading using opposite Hyundai Engineering and Dongkuk Structures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Dongkuk Structures 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 Dongkuk Structures will offset losses from the drop in Dongkuk Structures' long position.| Hyundai Engineering vs. LG Household Healthcare | Hyundai Engineering vs. Chorokbaem Healthcare Co | Hyundai Engineering vs. NH Investment Securities | Hyundai Engineering vs. Samsung Publishing Co |
| Dongkuk Structures vs. Dong A Steel Technology | Dongkuk Structures vs. Eagle Veterinary Technology | Dongkuk Structures vs. Hyundai Engineering Construction | Dongkuk Structures vs. Eugene Technology CoLtd |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |