Correlation Between Korea Alcohol and HYUNDAI BIOLAND
Can any of the company-specific risk be diversified away by investing in both Korea Alcohol and HYUNDAI BIOLAND 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 Alcohol and HYUNDAI BIOLAND into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Alcohol Industrial and HYUNDAI BIOLAND CoLtd, you can compare the effects of market volatilities on Korea Alcohol and HYUNDAI BIOLAND 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 Alcohol with a short position of HYUNDAI BIOLAND. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Alcohol and HYUNDAI BIOLAND.
Diversification Opportunities for Korea Alcohol and HYUNDAI BIOLAND
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Korea and HYUNDAI is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Korea Alcohol Industrial and HYUNDAI BIOLAND CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYUNDAI BIOLAND CoLtd and Korea Alcohol 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 Alcohol Industrial are associated (or correlated) with HYUNDAI BIOLAND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYUNDAI BIOLAND CoLtd has no effect on the direction of Korea Alcohol i.e., Korea Alcohol and HYUNDAI BIOLAND go up and down completely randomly.
Pair Corralation between Korea Alcohol and HYUNDAI BIOLAND
Assuming the 90 days trading horizon Korea Alcohol Industrial is expected to under-perform the HYUNDAI BIOLAND. But the stock apears to be less risky and, when comparing its historical volatility, Korea Alcohol Industrial is 2.23 times less risky than HYUNDAI BIOLAND. The stock trades about -0.1 of its potential returns per unit of risk. The HYUNDAI BIOLAND CoLtd is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 489,539 in HYUNDAI BIOLAND CoLtd on September 14, 2024 and sell it today you would lose (62,039) from holding HYUNDAI BIOLAND CoLtd or give up 12.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.59% |
| Values | Daily Returns |
Korea Alcohol Industrial vs. HYUNDAI BIOLAND CoLtd
Performance |
| Timeline |
| Korea Alcohol Industrial |
| HYUNDAI BIOLAND CoLtd |
Korea Alcohol and HYUNDAI BIOLAND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Alcohol and HYUNDAI BIOLAND
The main advantage of trading using opposite Korea Alcohol and HYUNDAI BIOLAND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Alcohol position performs unexpectedly, HYUNDAI BIOLAND 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 BIOLAND will offset losses from the drop in HYUNDAI BIOLAND's long position.| Korea Alcohol vs. LG Chemicals | Korea Alcohol vs. POSCO Holdings | Korea Alcohol vs. Hanwha Solutions | Korea Alcohol vs. Lotte Chemical Corp |
| HYUNDAI BIOLAND vs. LG Household Healthcare | HYUNDAI BIOLAND vs. Sungdo Engineering Construction | HYUNDAI BIOLAND vs. WooDeumGee Farm Co, | HYUNDAI BIOLAND vs. Aprogen Healthcare Games |
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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