Correlation Between Daewoo Electronic and Hyundai Home
Can any of the company-specific risk be diversified away by investing in both Daewoo Electronic and Hyundai Home 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 Daewoo Electronic and Hyundai Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo Electronic Components and Hyundai Home Shopping, you can compare the effects of market volatilities on Daewoo Electronic and Hyundai Home 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 Daewoo Electronic with a short position of Hyundai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo Electronic and Hyundai Home.
Diversification Opportunities for Daewoo Electronic and Hyundai Home
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daewoo and Hyundai is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo Electronic Components and Hyundai Home Shopping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Home Shopping and Daewoo Electronic 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 Daewoo Electronic Components are associated (or correlated) with Hyundai Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Home Shopping has no effect on the direction of Daewoo Electronic i.e., Daewoo Electronic and Hyundai Home go up and down completely randomly.
Pair Corralation between Daewoo Electronic and Hyundai Home
Assuming the 90 days trading horizon Daewoo Electronic Components is expected to under-perform the Hyundai Home. But the stock apears to be less risky and, when comparing its historical volatility, Daewoo Electronic Components is 4.89 times less risky than Hyundai Home. The stock trades about -0.25 of its potential returns per unit of risk. The Hyundai Home Shopping is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 4,450,000 in Hyundai Home Shopping on November 7, 2024 and sell it today you would earn a total of 525,000 from holding Hyundai Home Shopping or generate 11.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo Electronic Components vs. Hyundai Home Shopping
Performance |
| Timeline |
| Daewoo Electronic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hyundai Home Shopping |
Daewoo Electronic and Hyundai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo Electronic and Hyundai Home
The main advantage of trading using opposite Daewoo Electronic and Hyundai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo Electronic position performs unexpectedly, Hyundai Home 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 Home will offset losses from the drop in Hyundai Home's long position.| Daewoo Electronic vs. Woori Technology | Daewoo Electronic vs. Narae Nanotech Corp | Daewoo Electronic vs. KMH Hitech Co | Daewoo Electronic vs. PNC Technologies co |
| Hyundai Home vs. SK Chemicals Co | Hyundai Home vs. Aekyung Petrochemical Co | Hyundai Home vs. Neungyule Education | Hyundai Home vs. Samsung Life Insurance |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |