Correlation Between Hyundai and Korea Environment
Can any of the company-specific risk be diversified away by investing in both Hyundai and Korea Environment 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 and Korea Environment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Korea Environment Technology, you can compare the effects of market volatilities on Hyundai and Korea Environment 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 with a short position of Korea Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Korea Environment.
Diversification Opportunities for Hyundai and Korea Environment
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Korea is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Korea Environment Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Environment and Hyundai 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 Motor are associated (or correlated) with Korea Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Environment has no effect on the direction of Hyundai i.e., Hyundai and Korea Environment go up and down completely randomly.
Pair Corralation between Hyundai and Korea Environment
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 1.62 times more return on investment than Korea Environment. However, Hyundai is 1.62 times more volatile than Korea Environment Technology. It trades about 0.19 of its potential returns per unit of risk. Korea Environment Technology is currently generating about 0.26 per unit of risk. If you would invest 21,100,000 in Hyundai Motor on October 15, 2024 and sell it today you would earn a total of 1,500,000 from holding Hyundai Motor or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Korea Environment Technology
Performance |
| Timeline |
| Hyundai Motor |
| Korea Environment |
Hyundai and Korea Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Korea Environment
The main advantage of trading using opposite Hyundai and Korea Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Korea Environment 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 Korea Environment will offset losses from the drop in Korea Environment's long position.| Hyundai vs. Daou Data Corp | Hyundai vs. System and Application | Hyundai vs. Samsung Life Insurance | Hyundai vs. DataSolution |
| Korea Environment vs. INSUN Environmental New | Korea Environment vs. LEENO Industrial | Korea Environment vs. Kmw Inc | Korea Environment vs. NICE Information Service |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |