Correlation Between Daou Data and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both Daou Data 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 Daou Data and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daou Data Corp and Hyundai Engineering Plastics, you can compare the effects of market volatilities on Daou Data 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 Daou Data with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daou Data and Hyundai Engineering.
Diversification Opportunities for Daou Data and Hyundai Engineering
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daou and Hyundai is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Daou Data Corp and Hyundai Engineering Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and Daou Data 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 Daou Data Corp 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 Daou Data i.e., Daou Data and Hyundai Engineering go up and down completely randomly.
Pair Corralation between Daou Data and Hyundai Engineering
Assuming the 90 days trading horizon Daou Data Corp is expected to under-perform the Hyundai Engineering. In addition to that, Daou Data is 1.8 times more volatile than Hyundai Engineering Plastics. It trades about -0.05 of its total potential returns per unit of risk. Hyundai Engineering Plastics is currently generating about 0.0 per unit of volatility. If you would invest 379,328 in Hyundai Engineering Plastics on September 21, 2024 and sell it today you would lose (24,328) from holding Hyundai Engineering Plastics or give up 6.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daou Data Corp vs. Hyundai Engineering Plastics
Performance |
| Timeline |
| Daou Data Corp |
| Hyundai Engineering |
Daou Data and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daou Data and Hyundai Engineering
The main advantage of trading using opposite Daou Data and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daou Data 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.| Daou Data vs. KB Financial Group | Daou Data vs. Shinhan Financial Group | Daou Data vs. Hana Financial | Daou Data vs. Woori Financial Group |
| Hyundai Engineering vs. Daou Data Corp | Hyundai Engineering vs. Sangsangin Investment Securities | Hyundai Engineering vs. DSC Investment | Hyundai Engineering vs. NICE Information Service |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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