Correlation Between National Plastic and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both National Plastic and Hyundai Engineering 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 National Plastic and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Plastic Co and Hyundai Engineering Construction, you can compare the effects of market volatilities on National Plastic and Hyundai Engineering 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 National Plastic with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Plastic and Hyundai Engineering.
Diversification Opportunities for National Plastic and Hyundai Engineering
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Hyundai is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding National Plastic Co and Hyundai Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and National Plastic 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 National Plastic Co are associated (or correlated) with Hyundai Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Engineering has no effect on the direction of National Plastic i.e., National Plastic and Hyundai Engineering go up and down completely randomly.
Pair Corralation between National Plastic and Hyundai Engineering
Assuming the 90 days trading horizon National Plastic Co is expected to under-perform the Hyundai Engineering. But the stock apears to be less risky and, when comparing its historical volatility, National Plastic Co is 1.56 times less risky than Hyundai Engineering. The stock trades about -0.11 of its potential returns per unit of risk. The Hyundai Engineering Construction is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 2,835,000 in Hyundai Engineering Construction on October 24, 2024 and sell it today you would lose (225,000) from holding Hyundai Engineering Construction or give up 7.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Plastic Co vs. Hyundai Engineering Constructi
Performance |
| Timeline |
| National Plastic |
| Hyundai Engineering |
National Plastic and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Plastic and Hyundai Engineering
The main advantage of trading using opposite National Plastic and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Plastic position performs unexpectedly, Hyundai Engineering 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 Engineering will offset losses from the drop in Hyundai Engineering's long position.| National Plastic vs. Kukil Metal Co | National Plastic vs. Homecast CoLtd | National Plastic vs. Wireless Power Amplifier | National Plastic vs. INFINITT Healthcare Co |
| Hyundai Engineering vs. Union Materials Corp | Hyundai Engineering vs. KT Submarine Telecom | Hyundai Engineering vs. Dongbang Transport Logistics | Hyundai Engineering vs. National Plastic 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |