Correlation Between Automobile and Hyunwoo Industrial
Can any of the company-specific risk be diversified away by investing in both Automobile and Hyunwoo 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 Automobile and Hyunwoo Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automobile Pc and Hyunwoo Industrial Co, you can compare the effects of market volatilities on Automobile and Hyunwoo 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 Automobile with a short position of Hyunwoo Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automobile and Hyunwoo Industrial.
Diversification Opportunities for Automobile and Hyunwoo Industrial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Automobile and Hyunwoo is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Automobile Pc and Hyunwoo Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyunwoo Industrial and Automobile 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 Automobile Pc are associated (or correlated) with Hyunwoo Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyunwoo Industrial has no effect on the direction of Automobile i.e., Automobile and Hyunwoo Industrial go up and down completely randomly.
Pair Corralation between Automobile and Hyunwoo Industrial
Assuming the 90 days trading horizon Automobile Pc is expected to under-perform the Hyunwoo Industrial. In addition to that, Automobile is 1.4 times more volatile than Hyunwoo Industrial Co. It trades about -0.04 of its total potential returns per unit of risk. Hyunwoo Industrial Co is currently generating about -0.04 per unit of volatility. If you would invest 464,356 in Hyunwoo Industrial Co on October 30, 2024 and sell it today you would lose (202,856) from holding Hyunwoo Industrial Co or give up 43.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automobile Pc vs. Hyunwoo Industrial Co
Performance |
| Timeline |
| Automobile Pc |
| Hyunwoo Industrial |
Automobile and Hyunwoo Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automobile and Hyunwoo Industrial
The main advantage of trading using opposite Automobile and Hyunwoo Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automobile position performs unexpectedly, Hyunwoo 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 Hyunwoo Industrial will offset losses from the drop in Hyunwoo Industrial's long position.| Automobile vs. Hana Materials | Automobile vs. Hyosung Advanced Materials | Automobile vs. INNOX Advanced Materials | Automobile vs. Chorokbaem Healthcare Co |
| Hyunwoo Industrial vs. Songwon Industrial Co | Hyunwoo Industrial vs. Hankukpackage Co | Hyunwoo Industrial vs. Daol Investment Securities | Hyunwoo Industrial vs. Sam Yang Foods |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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