Correlation Between Hyundai BNG and BooKook Steel
Can any of the company-specific risk be diversified away by investing in both Hyundai BNG and BooKook Steel 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 BNG and BooKook Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai BNG Steel and BooKook Steel Co, you can compare the effects of market volatilities on Hyundai BNG and BooKook Steel 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 BNG with a short position of BooKook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai BNG and BooKook Steel.
Diversification Opportunities for Hyundai BNG and BooKook Steel
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and BooKook is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai BNG Steel and BooKook Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BooKook Steel and Hyundai BNG 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 BNG Steel are associated (or correlated) with BooKook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BooKook Steel has no effect on the direction of Hyundai BNG i.e., Hyundai BNG and BooKook Steel go up and down completely randomly.
Pair Corralation between Hyundai BNG and BooKook Steel
Assuming the 90 days trading horizon Hyundai BNG Steel is expected to generate 1.43 times more return on investment than BooKook Steel. However, Hyundai BNG is 1.43 times more volatile than BooKook Steel Co. It trades about 0.03 of its potential returns per unit of risk. BooKook Steel Co is currently generating about -0.01 per unit of risk. If you would invest 1,097,000 in Hyundai BNG Steel on November 2, 2024 and sell it today you would earn a total of 161,000 from holding Hyundai BNG Steel or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai BNG Steel vs. BooKook Steel Co
Performance |
| Timeline |
| Hyundai BNG Steel |
| BooKook Steel |
Hyundai BNG and BooKook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai BNG and BooKook Steel
The main advantage of trading using opposite Hyundai BNG and BooKook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai BNG position performs unexpectedly, BooKook Steel 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 BooKook Steel will offset losses from the drop in BooKook Steel's long position.| Hyundai BNG vs. Cuckoo Electronics Co | Hyundai BNG vs. Samsung Electronics Co | Hyundai BNG vs. KyungIn Electronics Co | Hyundai BNG vs. Sungmoon Electronics Co |
| BooKook Steel vs. KT Submarine Telecom | BooKook Steel vs. Kisan Telecom Co | BooKook Steel vs. Korea Information Communications | BooKook Steel vs. Hanmi Semiconductor 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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