Correlation Between Choil Aluminum and Hyundai Industrial
Can any of the company-specific risk be diversified away by investing in both Choil Aluminum 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 Choil Aluminum and Hyundai Industrial 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 Industrial Co, you can compare the effects of market volatilities on Choil Aluminum 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 Choil Aluminum with a short position of Hyundai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choil Aluminum and Hyundai Industrial.
Diversification Opportunities for Choil Aluminum and Hyundai Industrial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Choil and Hyundai is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Choil Aluminum and Hyundai Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Industrial 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 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 Choil Aluminum i.e., Choil Aluminum and Hyundai Industrial go up and down completely randomly.
Pair Corralation between Choil Aluminum and Hyundai Industrial
Assuming the 90 days trading horizon Choil Aluminum is expected to generate 2.01 times less return on investment than Hyundai Industrial. In addition to that, Choil Aluminum is 1.21 times more volatile than Hyundai Industrial Co. It trades about 0.15 of its total potential returns per unit of risk. Hyundai Industrial Co is currently generating about 0.37 per unit of volatility. If you would invest 484,351 in Hyundai Industrial Co on October 17, 2024 and sell it today you would earn a total of 38,649 from holding Hyundai Industrial Co or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choil Aluminum vs. Hyundai Industrial Co
Performance |
| Timeline |
| Choil Aluminum |
| Hyundai Industrial |
Choil Aluminum and Hyundai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choil Aluminum and Hyundai Industrial
The main advantage of trading using opposite Choil Aluminum and Hyundai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choil Aluminum 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.| Choil Aluminum vs. ABCO Electronics Co | Choil Aluminum vs. Narae Nanotech Corp | Choil Aluminum vs. Shinil Electronics Co | Choil Aluminum vs. Raontech |
| Hyundai Industrial vs. Hankukpackage Co | Hyundai Industrial vs. Choil Aluminum | Hyundai Industrial vs. Dongil Metal Co | Hyundai Industrial vs. Sung Bo Chemicals |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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