Correlation Between Korea Industrial and Hyundai Green
Can any of the company-specific risk be diversified away by investing in both Korea Industrial and Hyundai Green 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 Korea Industrial and Hyundai Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Industrial Co and Hyundai Green Food, you can compare the effects of market volatilities on Korea Industrial and Hyundai Green 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 Korea Industrial with a short position of Hyundai Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Industrial and Hyundai Green.
Diversification Opportunities for Korea Industrial and Hyundai Green
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Hyundai is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Korea Industrial Co and Hyundai Green Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Green Food and Korea Industrial 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 Korea Industrial Co are associated (or correlated) with Hyundai Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Green Food has no effect on the direction of Korea Industrial i.e., Korea Industrial and Hyundai Green go up and down completely randomly.
Pair Corralation between Korea Industrial and Hyundai Green
Assuming the 90 days trading horizon Korea Industrial Co is expected to generate 0.68 times more return on investment than Hyundai Green. However, Korea Industrial Co is 1.47 times less risky than Hyundai Green. It trades about 0.32 of its potential returns per unit of risk. Hyundai Green Food is currently generating about -0.13 per unit of risk. If you would invest 257,000 in Korea Industrial Co on October 28, 2024 and sell it today you would earn a total of 20,500 from holding Korea Industrial Co or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Industrial Co vs. Hyundai Green Food
Performance |
| Timeline |
| Korea Industrial |
| Hyundai Green Food |
Korea Industrial and Hyundai Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Industrial and Hyundai Green
The main advantage of trading using opposite Korea Industrial and Hyundai Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Industrial position performs unexpectedly, Hyundai Green 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 Hyundai Green will offset losses from the drop in Hyundai Green's long position.| Korea Industrial vs. Samyang Foods Co | Korea Industrial vs. Display Tech Co | Korea Industrial vs. Cuckoo Homesys Co | Korea Industrial vs. LG Display Co |
| Hyundai Green vs. Hyosung Advanced Materials | Hyundai Green vs. Jin Air Co | Hyundai Green vs. Samsung Publishing Co | Hyundai Green vs. Sangsangin Investment Securities |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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