Correlation Between Taeyang Metal and Hyundai Industrial
Can any of the company-specific risk be diversified away by investing in both Taeyang Metal and Hyundai Industrial 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 Taeyang Metal and Hyundai Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taeyang Metal Industrial and Hyundai Industrial Co, you can compare the effects of market volatilities on Taeyang Metal and Hyundai Industrial 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 Taeyang Metal with a short position of Hyundai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taeyang Metal and Hyundai Industrial.
Diversification Opportunities for Taeyang Metal and Hyundai Industrial
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Taeyang and Hyundai is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Taeyang Metal Industrial and Hyundai Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Industrial and Taeyang Metal 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 Taeyang Metal Industrial are associated (or correlated) with Hyundai Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Industrial has no effect on the direction of Taeyang Metal i.e., Taeyang Metal and Hyundai Industrial go up and down completely randomly.
Pair Corralation between Taeyang Metal and Hyundai Industrial
Assuming the 90 days trading horizon Taeyang Metal Industrial is expected to under-perform the Hyundai Industrial. In addition to that, Taeyang Metal is 2.29 times more volatile than Hyundai Industrial Co. It trades about -0.04 of its total potential returns per unit of risk. Hyundai Industrial Co is currently generating about -0.06 per unit of volatility. If you would invest 526,000 in Hyundai Industrial Co on August 25, 2024 and sell it today you would lose (12,000) from holding Hyundai Industrial Co or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taeyang Metal Industrial vs. Hyundai Industrial Co
Performance |
| Timeline |
| Taeyang Metal Industrial |
| Hyundai Industrial |
Taeyang Metal and Hyundai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taeyang Metal and Hyundai Industrial
The main advantage of trading using opposite Taeyang Metal and Hyundai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taeyang Metal position performs unexpectedly, Hyundai Industrial 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 Industrial will offset losses from the drop in Hyundai Industrial's long position.| Taeyang Metal vs. AptaBio Therapeutics | Taeyang Metal vs. Daewoo SBI SPAC | Taeyang Metal vs. Dream Security co | Taeyang Metal vs. Microfriend |
| Hyundai Industrial vs. Busan Industrial Co | Hyundai Industrial vs. Busan Ind | Hyundai Industrial vs. Mirae Asset Daewoo | Hyundai Industrial vs. UNISEM 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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