Correlation Between Hyundai Steel and LockLock
Can any of the company-specific risk be diversified away by investing in both Hyundai Steel and LockLock 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 LockLock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Steel and LockLock Co, you can compare the effects of market volatilities on Hyundai Steel and LockLock 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 LockLock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Steel and LockLock.
Diversification Opportunities for Hyundai Steel and LockLock
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and LockLock is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Steel and LockLock Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LockLock 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 LockLock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LockLock has no effect on the direction of Hyundai Steel i.e., Hyundai Steel and LockLock go up and down completely randomly.
Pair Corralation between Hyundai Steel and LockLock
Assuming the 90 days trading horizon Hyundai Steel is expected to under-perform the LockLock. In addition to that, Hyundai Steel is 55.1 times more volatile than LockLock Co. It trades about -0.04 of its total potential returns per unit of risk. LockLock Co is currently generating about -0.07 per unit of volatility. If you would invest 867,000 in LockLock Co on September 12, 2024 and sell it today you would lose (1,000.00) from holding LockLock Co or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hyundai Steel vs. LockLock Co
Performance |
| Timeline |
| Hyundai Steel |
| LockLock |
Hyundai Steel and LockLock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Steel and LockLock
The main advantage of trading using opposite Hyundai Steel and LockLock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Steel position performs unexpectedly, LockLock 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 LockLock will offset losses from the drop in LockLock's long position.| Hyundai Steel vs. LG Chemicals | Hyundai Steel vs. POSCO Holdings | Hyundai Steel vs. Hanwha Solutions | Hyundai Steel vs. Lotte Chemical Corp |
| LockLock vs. Stic Investments | LockLock vs. Atinum Investment Co | LockLock vs. E Investment Development | LockLock vs. Nh Investment And |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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