Correlation Between Hyundai Engineering and Woori Financial
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Woori Financial 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 Woori Financial 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 Woori Financial Group, you can compare the effects of market volatilities on Hyundai Engineering and Woori Financial 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 Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Woori Financial.
Diversification Opportunities for Hyundai Engineering and Woori Financial
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Woori is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Constructi and Woori Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Financial Group 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 Woori Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Financial Group has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Woori Financial go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Woori Financial
Assuming the 90 days trading horizon Hyundai Engineering Construction is expected to generate 2.99 times more return on investment than Woori Financial. However, Hyundai Engineering is 2.99 times more volatile than Woori Financial Group. It trades about 0.01 of its potential returns per unit of risk. Woori Financial Group is currently generating about 0.0 per unit of risk. If you would invest 2,610,000 in Hyundai Engineering Construction on October 24, 2024 and sell it today you would earn a total of 0.00 from holding Hyundai Engineering Construction or generate 0.0% 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. Woori Financial Group
Performance |
| Timeline |
| Hyundai Engineering |
| Woori Financial Group |
Hyundai Engineering and Woori Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Woori Financial
The main advantage of trading using opposite Hyundai Engineering and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Woori Financial 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 Woori Financial will offset losses from the drop in Woori Financial's long position.| Hyundai Engineering vs. Union Materials Corp | Hyundai Engineering vs. KT Submarine Telecom | Hyundai Engineering vs. Dongbang Transport Logistics | Hyundai Engineering vs. National Plastic Co |
| Woori Financial vs. Hankook Furniture Co | Woori Financial vs. Shinsegae Food | Woori Financial vs. Dongbang Transport Logistics | Woori Financial vs. Organic Special Pet |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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