Correlation Between Hyundai Mobis and Kwang Jin
Can any of the company-specific risk be diversified away by investing in both Hyundai Mobis and Kwang Jin 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 Hyundai Mobis and Kwang Jin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Mobis and Kwang Jin Ind, you can compare the effects of market volatilities on Hyundai Mobis and Kwang Jin 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 Hyundai Mobis with a short position of Kwang Jin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Mobis and Kwang Jin.
Diversification Opportunities for Hyundai Mobis and Kwang Jin
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Kwang is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Mobis and Kwang Jin Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kwang Jin Ind and Hyundai Mobis 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 Hyundai Mobis are associated (or correlated) with Kwang Jin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kwang Jin Ind has no effect on the direction of Hyundai Mobis i.e., Hyundai Mobis and Kwang Jin go up and down completely randomly.
Pair Corralation between Hyundai Mobis and Kwang Jin
Assuming the 90 days trading horizon Hyundai Mobis is expected to under-perform the Kwang Jin. In addition to that, Hyundai Mobis is 1.17 times more volatile than Kwang Jin Ind. It trades about -0.08 of its total potential returns per unit of risk. Kwang Jin Ind is currently generating about 0.11 per unit of volatility. If you would invest 196,000 in Kwang Jin Ind on September 22, 2024 and sell it today you would earn a total of 8,000 from holding Kwang Jin Ind or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Mobis vs. Kwang Jin Ind
Performance |
| Timeline |
| Hyundai Mobis |
| Kwang Jin Ind |
Hyundai Mobis and Kwang Jin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Mobis and Kwang Jin
The main advantage of trading using opposite Hyundai Mobis and Kwang Jin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Mobis position performs unexpectedly, Kwang Jin 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 Kwang Jin will offset losses from the drop in Kwang Jin's long position.| Hyundai Mobis vs. Daou Data Corp | Hyundai Mobis vs. Solution Advanced Technology | Hyundai Mobis vs. Busan Industrial Co | Hyundai Mobis vs. Busan Ind |
| Kwang Jin vs. Mobileleader CoLtd | Kwang Jin vs. Lotte Data Communication | Kwang Jin vs. Grand Korea Leisure | Kwang Jin vs. Kisan Telecom 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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