Correlation Between Hanil Chemical and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both Hanil Chemical and Hyundai Engineering 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 Hanil Chemical and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanil Chemical Ind and Hyundai Engineering Construction, you can compare the effects of market volatilities on Hanil Chemical and Hyundai Engineering 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 Hanil Chemical with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanil Chemical and Hyundai Engineering.
Diversification Opportunities for Hanil Chemical and Hyundai Engineering
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hanil and Hyundai is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hanil Chemical Ind and Hyundai Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and Hanil Chemical 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 Hanil Chemical Ind are associated (or correlated) with Hyundai Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Engineering has no effect on the direction of Hanil Chemical i.e., Hanil Chemical and Hyundai Engineering go up and down completely randomly.
Pair Corralation between Hanil Chemical and Hyundai Engineering
Assuming the 90 days trading horizon Hanil Chemical Ind is expected to generate 1.07 times more return on investment than Hyundai Engineering. However, Hanil Chemical is 1.07 times more volatile than Hyundai Engineering Construction. It trades about -0.05 of its potential returns per unit of risk. Hyundai Engineering Construction is currently generating about -0.12 per unit of risk. If you would invest 1,218,608 in Hanil Chemical Ind on October 18, 2024 and sell it today you would lose (109,608) from holding Hanil Chemical Ind or give up 8.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanil Chemical Ind vs. Hyundai Engineering Constructi
Performance |
| Timeline |
| Hanil Chemical Ind |
| Hyundai Engineering |
Hanil Chemical and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanil Chemical and Hyundai Engineering
The main advantage of trading using opposite Hanil Chemical and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanil Chemical position performs unexpectedly, Hyundai Engineering 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 Engineering will offset losses from the drop in Hyundai Engineering's long position.| Hanil Chemical vs. LG Chemicals | Hanil Chemical vs. POSCO Holdings | Hanil Chemical vs. Lotte Chemical Corp | Hanil Chemical vs. Hyundai Steel |
| Hyundai Engineering vs. TK Chemical | Hyundai Engineering vs. Sangsin Energy Display | Hyundai Engineering vs. KPX Green Chemical | Hyundai Engineering vs. Hanil Chemical Ind |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |