Correlation Between Kisan Telecom and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both Kisan Telecom 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 Kisan Telecom and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kisan Telecom Co and Hyundai Engineering Plastics, you can compare the effects of market volatilities on Kisan Telecom 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 Kisan Telecom with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kisan Telecom and Hyundai Engineering.
Diversification Opportunities for Kisan Telecom and Hyundai Engineering
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kisan and Hyundai is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kisan Telecom Co and Hyundai Engineering Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and Kisan Telecom 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 Kisan Telecom Co 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 Kisan Telecom i.e., Kisan Telecom and Hyundai Engineering go up and down completely randomly.
Pair Corralation between Kisan Telecom and Hyundai Engineering
Assuming the 90 days trading horizon Kisan Telecom Co is expected to generate 0.73 times more return on investment than Hyundai Engineering. However, Kisan Telecom Co is 1.37 times less risky than Hyundai Engineering. It trades about 0.08 of its potential returns per unit of risk. Hyundai Engineering Plastics is currently generating about -0.09 per unit of risk. If you would invest 173,000 in Kisan Telecom Co on October 11, 2024 and sell it today you would earn a total of 7,900 from holding Kisan Telecom Co or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kisan Telecom Co vs. Hyundai Engineering Plastics
Performance |
| Timeline |
| Kisan Telecom |
| Hyundai Engineering |
Kisan Telecom and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kisan Telecom and Hyundai Engineering
The main advantage of trading using opposite Kisan Telecom and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kisan Telecom 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.| Kisan Telecom vs. DONGKUK TED METAL | Kisan Telecom vs. Ilji Technology Co | Kisan Telecom vs. Eugene Technology CoLtd | Kisan Telecom vs. Korea Shipbuilding Offshore |
| Hyundai Engineering vs. Camus Engineering Construction | Hyundai Engineering vs. GS Engineering Construction | Hyundai Engineering vs. Air Busan Co | Hyundai Engineering vs. Dongbang Ship Machinery |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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