Correlation Between FOODWELL and Hyundai Steel
Can any of the company-specific risk be diversified away by investing in both FOODWELL and Hyundai 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 FOODWELL and Hyundai Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FOODWELL Co and Hyundai Steel, you can compare the effects of market volatilities on FOODWELL and Hyundai 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 FOODWELL with a short position of Hyundai Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOODWELL and Hyundai Steel.
Diversification Opportunities for FOODWELL and Hyundai Steel
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FOODWELL and Hyundai is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding FOODWELL Co and Hyundai Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Steel and FOODWELL 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 FOODWELL Co are associated (or correlated) with Hyundai Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Steel has no effect on the direction of FOODWELL i.e., FOODWELL and Hyundai Steel go up and down completely randomly.
Pair Corralation between FOODWELL and Hyundai Steel
Assuming the 90 days trading horizon FOODWELL Co is expected to generate 0.94 times more return on investment than Hyundai Steel. However, FOODWELL Co is 1.06 times less risky than Hyundai Steel. It trades about 0.04 of its potential returns per unit of risk. Hyundai Steel is currently generating about -0.07 per unit of risk. If you would invest 461,893 in FOODWELL Co on August 25, 2024 and sell it today you would earn a total of 66,107 from holding FOODWELL Co or generate 14.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FOODWELL Co vs. Hyundai Steel
Performance |
| Timeline |
| FOODWELL |
| Hyundai Steel |
FOODWELL and Hyundai Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOODWELL and Hyundai Steel
The main advantage of trading using opposite FOODWELL and Hyundai Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOODWELL position performs unexpectedly, Hyundai 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 Hyundai Steel will offset losses from the drop in Hyundai Steel's long position.| FOODWELL vs. DB Financial Investment | FOODWELL vs. Woori Technology Investment | FOODWELL vs. Atinum Investment Co | FOODWELL vs. Nh Investment And |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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