Correlation Between Hyundai Engineering and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Dongil Metal 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 Dongil Metal 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 Dongil Metal Co, you can compare the effects of market volatilities on Hyundai Engineering and Dongil Metal 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 Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Dongil Metal.
Diversification Opportunities for Hyundai Engineering and Dongil Metal
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Dongil is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Constructi and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Metal 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 Dongil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Metal has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Dongil Metal go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Dongil Metal
Assuming the 90 days trading horizon Hyundai Engineering is expected to generate 3.18 times less return on investment than Dongil Metal. In addition to that, Hyundai Engineering is 1.2 times more volatile than Dongil Metal Co. It trades about 0.06 of its total potential returns per unit of risk. Dongil Metal Co is currently generating about 0.24 per unit of volatility. If you would invest 766,801 in Dongil Metal Co on October 14, 2024 and sell it today you would earn a total of 47,199 from holding Dongil Metal Co or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Engineering Constructi vs. Dongil Metal Co
Performance |
| Timeline |
| Hyundai Engineering |
| Dongil Metal |
Hyundai Engineering and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Dongil Metal
The main advantage of trading using opposite Hyundai Engineering and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Dongil Metal 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 Dongil Metal will offset losses from the drop in Dongil Metal's 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 |
| Dongil Metal vs. Hyundai Engineering Construction | Dongil Metal vs. Hotel Shilla Co | Dongil Metal vs. Kisan Telecom Co | Dongil Metal vs. Camus Engineering 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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