Correlation Between Myoung Shin and Hyundai Industrial
Can any of the company-specific risk be diversified away by investing in both Myoung Shin and Hyundai Industrial 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 Myoung Shin and Hyundai Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Myoung Shin Industrial and Hyundai Industrial Co, you can compare the effects of market volatilities on Myoung Shin and Hyundai Industrial 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 Myoung Shin with a short position of Hyundai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Myoung Shin and Hyundai Industrial.
Diversification Opportunities for Myoung Shin and Hyundai Industrial
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Myoung and Hyundai is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Myoung Shin Industrial and Hyundai Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Industrial and Myoung Shin 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 Myoung Shin Industrial are associated (or correlated) with Hyundai Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Industrial has no effect on the direction of Myoung Shin i.e., Myoung Shin and Hyundai Industrial go up and down completely randomly.
Pair Corralation between Myoung Shin and Hyundai Industrial
Assuming the 90 days trading horizon Myoung Shin Industrial is expected to under-perform the Hyundai Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Myoung Shin Industrial is 1.0 times less risky than Hyundai Industrial. The stock trades about -0.01 of its potential returns per unit of risk. The Hyundai Industrial Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 654,344 in Hyundai Industrial Co on August 29, 2024 and sell it today you would lose (136,344) from holding Hyundai Industrial Co or give up 20.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Myoung Shin Industrial vs. Hyundai Industrial Co
Performance |
| Timeline |
| Myoung Shin Industrial |
| Hyundai Industrial |
Myoung Shin and Hyundai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Myoung Shin and Hyundai Industrial
The main advantage of trading using opposite Myoung Shin and Hyundai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Myoung Shin position performs unexpectedly, Hyundai Industrial 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 Industrial will offset losses from the drop in Hyundai Industrial's long position.| Myoung Shin vs. Sungwoo Electronics Co | Myoung Shin vs. Samwha Electronics Co | Myoung Shin vs. Namhwa Industrial Co | Myoung Shin vs. Kbi Metal Co |
| Hyundai Industrial vs. Busan Industrial Co | Hyundai Industrial vs. Busan Ind | Hyundai Industrial vs. Mirae Asset Daewoo | Hyundai Industrial vs. UNISEM Co |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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