Correlation Between Korea Information and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both Korea Information and Hyundai Engineering 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 Information and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Communications and Hyundai Engineering Construction, you can compare the effects of market volatilities on Korea Information and Hyundai Engineering 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 Information with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Hyundai Engineering.
Diversification Opportunities for Korea Information and Hyundai Engineering
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Korea and Hyundai is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Communicatio and Hyundai Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and Korea Information 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 Information Communications are associated (or correlated) with Hyundai Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Engineering has no effect on the direction of Korea Information i.e., Korea Information and Hyundai Engineering go up and down completely randomly.
Pair Corralation between Korea Information and Hyundai Engineering
Assuming the 90 days trading horizon Korea Information Communications is expected to under-perform the Hyundai Engineering. In addition to that, Korea Information is 1.02 times more volatile than Hyundai Engineering Construction. It trades about -0.07 of its total potential returns per unit of risk. Hyundai Engineering Construction is currently generating about 0.0 per unit of volatility. If you would invest 3,561,217 in Hyundai Engineering Construction on October 29, 2024 and sell it today you would lose (411,217) from holding Hyundai Engineering Construction or give up 11.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Communicatio vs. Hyundai Engineering Constructi
Performance |
| Timeline |
| Korea Information |
| Hyundai Engineering |
Korea Information and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Hyundai Engineering
The main advantage of trading using opposite Korea Information and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information position performs unexpectedly, Hyundai Engineering 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 Engineering will offset losses from the drop in Hyundai Engineering's long position.| Korea Information vs. TS Investment Corp | Korea Information vs. Tae Kyung Chemical | Korea Information vs. Kyung In Synthetic Corp | Korea Information vs. KTB Investment Securities |
| Hyundai Engineering vs. Nasmedia Co | Hyundai Engineering vs. Namhwa Industrial Co | Hyundai Engineering vs. Songwon Industrial Co | Hyundai Engineering vs. Dongil Metal 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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