Correlation Between Han Kook and Hyundai Heavy
Can any of the company-specific risk be diversified away by investing in both Han Kook and Hyundai Heavy 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 Han Kook and Hyundai Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Han Kook Steel and Hyundai Heavy Industries, you can compare the effects of market volatilities on Han Kook and Hyundai Heavy 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 Han Kook with a short position of Hyundai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Han Kook and Hyundai Heavy.
Diversification Opportunities for Han Kook and Hyundai Heavy
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Han and Hyundai is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Steel and Hyundai Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Heavy Industries and Han Kook 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 Han Kook Steel are associated (or correlated) with Hyundai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Heavy Industries has no effect on the direction of Han Kook i.e., Han Kook and Hyundai Heavy go up and down completely randomly.
Pair Corralation between Han Kook and Hyundai Heavy
Assuming the 90 days trading horizon Han Kook Steel is expected to under-perform the Hyundai Heavy. In addition to that, Han Kook is 1.24 times more volatile than Hyundai Heavy Industries. It trades about 0.0 of its total potential returns per unit of risk. Hyundai Heavy Industries is currently generating about 0.06 per unit of volatility. If you would invest 11,500,000 in Hyundai Heavy Industries on September 2, 2024 and sell it today you would earn a total of 10,500,000 from holding Hyundai Heavy Industries or generate 91.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Han Kook Steel vs. Hyundai Heavy Industries
Performance |
| Timeline |
| Han Kook Steel |
| Hyundai Heavy Industries |
Han Kook and Hyundai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Han Kook and Hyundai Heavy
The main advantage of trading using opposite Han Kook and Hyundai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook position performs unexpectedly, Hyundai Heavy 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 Heavy will offset losses from the drop in Hyundai Heavy's long position.The idea behind Han Kook Steel and Hyundai Heavy Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hyundai Heavy vs. Daehan Steel | Hyundai Heavy vs. Daechang Steel Co | Hyundai Heavy vs. Han Kook Steel | Hyundai Heavy vs. Daeduck Electronics 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stocks Directory Find actively traded stocks across global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |