Correlation Between Hyundai BNG and INSUN Environmental
Can any of the company-specific risk be diversified away by investing in both Hyundai BNG and INSUN Environmental 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 INSUN Environmental 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 INSUN Environmental New, you can compare the effects of market volatilities on Hyundai BNG and INSUN Environmental 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 INSUN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai BNG and INSUN Environmental.
Diversification Opportunities for Hyundai BNG and INSUN Environmental
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and INSUN is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai BNG Steel and INSUN Environmental New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSUN Environmental New 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 INSUN Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSUN Environmental New has no effect on the direction of Hyundai BNG i.e., Hyundai BNG and INSUN Environmental go up and down completely randomly.
Pair Corralation between Hyundai BNG and INSUN Environmental
Assuming the 90 days trading horizon Hyundai BNG Steel is expected to generate 2.37 times more return on investment than INSUN Environmental. However, Hyundai BNG is 2.37 times more volatile than INSUN Environmental New. It trades about 0.03 of its potential returns per unit of risk. INSUN Environmental New is currently generating about -0.05 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. INSUN Environmental New
Performance |
| Timeline |
| Hyundai BNG Steel |
| INSUN Environmental New |
Hyundai BNG and INSUN Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai BNG and INSUN Environmental
The main advantage of trading using opposite Hyundai BNG and INSUN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai BNG position performs unexpectedly, INSUN Environmental 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 INSUN Environmental will offset losses from the drop in INSUN Environmental'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 |
| INSUN Environmental vs. Korea Environment Technology | INSUN Environmental vs. Paradise Co | INSUN Environmental vs. Seoul Semiconductor Co | INSUN Environmental vs. JUSUNG ENGINEERING 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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