Correlation Between Hyundai Steel and ENF Technology
Can any of the company-specific risk be diversified away by investing in both Hyundai Steel and ENF Technology 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 Steel and ENF Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Steel and ENF Technology Co, you can compare the effects of market volatilities on Hyundai Steel and ENF Technology 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 Steel with a short position of ENF Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Steel and ENF Technology.
Diversification Opportunities for Hyundai Steel and ENF Technology
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and ENF is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Steel and ENF Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENF Technology and Hyundai Steel 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 Steel are associated (or correlated) with ENF Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENF Technology has no effect on the direction of Hyundai Steel i.e., Hyundai Steel and ENF Technology go up and down completely randomly.
Pair Corralation between Hyundai Steel and ENF Technology
Assuming the 90 days trading horizon Hyundai Steel is expected to generate 0.8 times more return on investment than ENF Technology. However, Hyundai Steel is 1.24 times less risky than ENF Technology. It trades about -0.07 of its potential returns per unit of risk. ENF Technology Co is currently generating about -0.11 per unit of risk. If you would invest 2,775,000 in Hyundai Steel on September 21, 2024 and sell it today you would lose (575,000) from holding Hyundai Steel or give up 20.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Steel vs. ENF Technology Co
Performance |
| Timeline |
| Hyundai Steel |
| ENF Technology |
Hyundai Steel and ENF Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Steel and ENF Technology
The main advantage of trading using opposite Hyundai Steel and ENF Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Steel position performs unexpectedly, ENF Technology 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 ENF Technology will offset losses from the drop in ENF Technology's long position.| Hyundai Steel vs. LG Chemicals | Hyundai Steel vs. Hanwha Solutions | Hyundai Steel vs. Lotte Chemical Corp | Hyundai Steel vs. Dongkuk Steel Mill |
| ENF Technology vs. Dongjin Semichem Co | ENF Technology vs. SS TECH | ENF Technology vs. Tokai Carbon Korea | ENF Technology vs. Soulbrain Holdings Co |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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