Correlation Between Korea Real and Hyundai Industrial
Can any of the company-specific risk be diversified away by investing in both Korea Real 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 Korea Real and Hyundai Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Real Estate and Hyundai Industrial Co, you can compare the effects of market volatilities on Korea Real 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 Korea Real with a short position of Hyundai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Real and Hyundai Industrial.
Diversification Opportunities for Korea Real and Hyundai Industrial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Korea and Hyundai is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Korea Real Estate and Hyundai Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Industrial and Korea Real 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 Real Estate 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 Korea Real i.e., Korea Real and Hyundai Industrial go up and down completely randomly.
Pair Corralation between Korea Real and Hyundai Industrial
Assuming the 90 days trading horizon Korea Real Estate is expected to generate 0.49 times more return on investment than Hyundai Industrial. However, Korea Real Estate is 2.04 times less risky than Hyundai Industrial. It trades about -0.14 of its potential returns per unit of risk. Hyundai Industrial Co is currently generating about -0.19 per unit of risk. If you would invest 103,900 in Korea Real Estate on September 5, 2024 and sell it today you would lose (2,400) from holding Korea Real Estate or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Real Estate vs. Hyundai Industrial Co
Performance |
| Timeline |
| Korea Real Estate |
| Hyundai Industrial |
Korea Real and Hyundai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Real and Hyundai Industrial
The main advantage of trading using opposite Korea Real and Hyundai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Real 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.| Korea Real vs. Samsung Electronics Co | Korea Real vs. Samsung Electronics Co | Korea Real vs. LG Energy Solution | Korea Real vs. SK Hynix |
| Hyundai Industrial vs. Korea Real Estate | Hyundai Industrial vs. Busan Industrial Co | Hyundai Industrial vs. UNISEM Co | Hyundai Industrial vs. RPBio Inc |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |