Correlation Between Hyundai and Hanwha Techwin
Can any of the company-specific risk be diversified away by investing in both Hyundai and Hanwha Techwin 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 Hanwha Techwin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor Co and Hanwha Techwin Co, you can compare the effects of market volatilities on Hyundai and Hanwha Techwin 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 Hanwha Techwin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Hanwha Techwin.
Diversification Opportunities for Hyundai and Hanwha Techwin
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Hanwha is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Hanwha Techwin Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Techwin 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 Co are associated (or correlated) with Hanwha Techwin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Techwin has no effect on the direction of Hyundai i.e., Hyundai and Hanwha Techwin go up and down completely randomly.
Pair Corralation between Hyundai and Hanwha Techwin
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.43 times more return on investment than Hanwha Techwin. However, Hyundai Motor Co is 2.33 times less risky than Hanwha Techwin. It trades about 0.03 of its potential returns per unit of risk. Hanwha Techwin Co is currently generating about -0.16 per unit of risk. If you would invest 16,850,000 in Hyundai Motor Co on August 28, 2024 and sell it today you would earn a total of 170,000 from holding Hyundai Motor Co or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Hanwha Techwin Co
Performance |
| Timeline |
| Hyundai Motor |
| Hanwha Techwin |
Hyundai and Hanwha Techwin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Hanwha Techwin
The main advantage of trading using opposite Hyundai and Hanwha Techwin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Hanwha Techwin 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 Hanwha Techwin will offset losses from the drop in Hanwha Techwin's long position.| Hyundai vs. Lake Materials Co | Hyundai vs. KB Financial Group | Hyundai vs. Jeju Air Co | Hyundai vs. LAKE MATERIALS LTD |
| Hanwha Techwin vs. Samsung Electronics Co | Hanwha Techwin vs. Samsung Electronics Co | Hanwha Techwin vs. LG Energy Solution | Hanwha Techwin vs. SK Hynix |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |