Correlation Between Daehan Synthetic and Hyundai Heavy
Can any of the company-specific risk be diversified away by investing in both Daehan Synthetic and Hyundai Heavy 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 Daehan Synthetic and Hyundai Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Synthetic Fiber and Hyundai Heavy Industries, you can compare the effects of market volatilities on Daehan Synthetic and Hyundai Heavy 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 Daehan Synthetic with a short position of Hyundai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Synthetic and Hyundai Heavy.
Diversification Opportunities for Daehan Synthetic and Hyundai Heavy
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daehan and Hyundai is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Synthetic Fiber and Hyundai Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Heavy Industries and Daehan Synthetic 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 Daehan Synthetic Fiber are associated (or correlated) with Hyundai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Heavy Industries has no effect on the direction of Daehan Synthetic i.e., Daehan Synthetic and Hyundai Heavy go up and down completely randomly.
Pair Corralation between Daehan Synthetic and Hyundai Heavy
Assuming the 90 days trading horizon Daehan Synthetic Fiber is expected to generate 0.25 times more return on investment than Hyundai Heavy. However, Daehan Synthetic Fiber is 4.03 times less risky than Hyundai Heavy. It trades about -0.01 of its potential returns per unit of risk. Hyundai Heavy Industries is currently generating about -0.2 per unit of risk. If you would invest 10,580,000 in Daehan Synthetic Fiber on December 1, 2024 and sell it today you would lose (20,000) from holding Daehan Synthetic Fiber or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Synthetic Fiber vs. Hyundai Heavy Industries
Performance |
| Timeline |
| Daehan Synthetic Fiber |
| Hyundai Heavy Industries |
Daehan Synthetic and Hyundai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Synthetic and Hyundai Heavy
The main advantage of trading using opposite Daehan Synthetic and Hyundai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Synthetic position performs unexpectedly, Hyundai Heavy 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 Heavy will offset losses from the drop in Hyundai Heavy's long position.| Daehan Synthetic vs. EBEST Investment Securities | Daehan Synthetic vs. Eugene Investment Securities | Daehan Synthetic vs. SV Investment | Daehan Synthetic vs. Atinum Investment Co |
| Hyundai Heavy vs. Golden Bridge Investment | Hyundai Heavy vs. SV Investment | Hyundai Heavy vs. PLAYWITH | Hyundai Heavy vs. DB Financial Investment |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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