Correlation Between Korea Refract and Hyosung Heavy
Can any of the company-specific risk be diversified away by investing in both Korea Refract and Hyosung Heavy 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 Korea Refract and Hyosung Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Refract and Hyosung Heavy Industries, you can compare the effects of market volatilities on Korea Refract and Hyosung Heavy 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 Korea Refract with a short position of Hyosung Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Refract and Hyosung Heavy.
Diversification Opportunities for Korea Refract and Hyosung Heavy
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Hyosung is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Korea Refract and Hyosung Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Heavy Industries and Korea Refract 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 Korea Refract are associated (or correlated) with Hyosung Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Heavy Industries has no effect on the direction of Korea Refract i.e., Korea Refract and Hyosung Heavy go up and down completely randomly.
Pair Corralation between Korea Refract and Hyosung Heavy
Assuming the 90 days trading horizon Korea Refract is expected to generate 0.47 times more return on investment than Hyosung Heavy. However, Korea Refract is 2.13 times less risky than Hyosung Heavy. It trades about -0.01 of its potential returns per unit of risk. Hyosung Heavy Industries is currently generating about -0.15 per unit of risk. If you would invest 211,000 in Korea Refract on September 13, 2024 and sell it today you would lose (2,000) from holding Korea Refract or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Korea Refract vs. Hyosung Heavy Industries
Performance |
| Timeline |
| Korea Refract |
| Hyosung Heavy Industries |
Korea Refract and Hyosung Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Refract and Hyosung Heavy
The main advantage of trading using opposite Korea Refract and Hyosung Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Refract position performs unexpectedly, Hyosung Heavy 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 Hyosung Heavy will offset losses from the drop in Hyosung Heavy's long position.| Korea Refract vs. Automobile Pc | Korea Refract vs. Kisan Telecom Co | Korea Refract vs. Hwangkum Steel Technology | Korea Refract vs. HB Technology TD |
| Hyosung Heavy vs. LG Energy Solution | Hyosung Heavy vs. Doosan Heavy Ind | Hyosung Heavy vs. Aprogen KIC | Hyosung Heavy vs. Korea Refract |
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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