Correlation Between Choil Aluminum and Hyundai Home
Can any of the company-specific risk be diversified away by investing in both Choil Aluminum and Hyundai Home 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 Choil Aluminum and Hyundai Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choil Aluminum and Hyundai Home Shopping, you can compare the effects of market volatilities on Choil Aluminum and Hyundai Home 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 Choil Aluminum with a short position of Hyundai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choil Aluminum and Hyundai Home.
Diversification Opportunities for Choil Aluminum and Hyundai Home
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Choil and Hyundai is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Choil Aluminum and Hyundai Home Shopping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Home Shopping and Choil Aluminum 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 Choil Aluminum are associated (or correlated) with Hyundai Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Home Shopping has no effect on the direction of Choil Aluminum i.e., Choil Aluminum and Hyundai Home go up and down completely randomly.
Pair Corralation between Choil Aluminum and Hyundai Home
Assuming the 90 days trading horizon Choil Aluminum is expected to generate 0.97 times more return on investment than Hyundai Home. However, Choil Aluminum is 1.03 times less risky than Hyundai Home. It trades about 0.15 of its potential returns per unit of risk. Hyundai Home Shopping is currently generating about -0.16 per unit of risk. If you would invest 145,200 in Choil Aluminum on October 17, 2024 and sell it today you would earn a total of 5,500 from holding Choil Aluminum or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choil Aluminum vs. Hyundai Home Shopping
Performance |
| Timeline |
| Choil Aluminum |
| Hyundai Home Shopping |
Choil Aluminum and Hyundai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choil Aluminum and Hyundai Home
The main advantage of trading using opposite Choil Aluminum and Hyundai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choil Aluminum position performs unexpectedly, Hyundai Home 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 Home will offset losses from the drop in Hyundai Home's long position.| Choil Aluminum vs. ABCO Electronics Co | Choil Aluminum vs. Narae Nanotech Corp | Choil Aluminum vs. Shinil Electronics Co | Choil Aluminum vs. Raontech |
| Hyundai Home vs. Korean Air Lines | Hyundai Home vs. DSC Investment | Hyundai Home vs. Alton Sports CoLtd | Hyundai Home vs. Cloud Air 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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