Correlation Between Heungkuk Metaltech and Hyundai Industrial
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech 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 Heungkuk Metaltech and Hyundai Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heungkuk Metaltech CoLtd and Hyundai Industrial Co, you can compare the effects of market volatilities on Heungkuk Metaltech 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 Heungkuk Metaltech with a short position of Hyundai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Hyundai Industrial.
Diversification Opportunities for Heungkuk Metaltech and Hyundai Industrial
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Heungkuk and Hyundai is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Hyundai Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Industrial and Heungkuk Metaltech 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 Heungkuk Metaltech CoLtd 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 Heungkuk Metaltech i.e., Heungkuk Metaltech and Hyundai Industrial go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Hyundai Industrial
Assuming the 90 days trading horizon Heungkuk Metaltech is expected to generate 3.59 times less return on investment than Hyundai Industrial. But when comparing it to its historical volatility, Heungkuk Metaltech CoLtd is 1.6 times less risky than Hyundai Industrial. It trades about 0.0 of its potential returns per unit of risk. Hyundai Industrial Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 600,277 in Hyundai Industrial Co on October 14, 2024 and sell it today you would lose (76,277) from holding Hyundai Industrial Co or give up 12.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Hyundai Industrial Co
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Hyundai Industrial |
Heungkuk Metaltech and Hyundai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Hyundai Industrial
The main advantage of trading using opposite Heungkuk Metaltech and Hyundai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech 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.| Heungkuk Metaltech vs. Mirai Semiconductors Co | Heungkuk Metaltech vs. LG Household Healthcare | Heungkuk Metaltech vs. BIT Computer Co | Heungkuk Metaltech vs. Air Busan Co |
| Hyundai Industrial vs. Cube Entertainment | Hyundai Industrial vs. SM Entertainment Co | Hyundai Industrial vs. DONGKUK TED METAL | Hyundai Industrial vs. Heungkuk Metaltech CoLtd |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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