Correlation Between Cloud Air and Hyunwoo Industrial
Can any of the company-specific risk be diversified away by investing in both Cloud Air and Hyunwoo 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 Cloud Air and Hyunwoo Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloud Air CoLtd and Hyunwoo Industrial Co, you can compare the effects of market volatilities on Cloud Air and Hyunwoo 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 Cloud Air with a short position of Hyunwoo Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloud Air and Hyunwoo Industrial.
Diversification Opportunities for Cloud Air and Hyunwoo Industrial
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cloud and Hyunwoo is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Air CoLtd and Hyunwoo Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyunwoo Industrial and Cloud Air 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 Cloud Air CoLtd are associated (or correlated) with Hyunwoo Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyunwoo Industrial has no effect on the direction of Cloud Air i.e., Cloud Air and Hyunwoo Industrial go up and down completely randomly.
Pair Corralation between Cloud Air and Hyunwoo Industrial
Assuming the 90 days trading horizon Cloud Air CoLtd is expected to generate 1.03 times more return on investment than Hyunwoo Industrial. However, Cloud Air is 1.03 times more volatile than Hyunwoo Industrial Co. It trades about 0.0 of its potential returns per unit of risk. Hyunwoo Industrial Co is currently generating about -0.04 per unit of risk. If you would invest 99,000 in Cloud Air CoLtd on October 12, 2024 and sell it today you would lose (10,500) from holding Cloud Air CoLtd or give up 10.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloud Air CoLtd vs. Hyunwoo Industrial Co
Performance |
| Timeline |
| Cloud Air CoLtd |
| Hyunwoo Industrial |
Cloud Air and Hyunwoo Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloud Air and Hyunwoo Industrial
The main advantage of trading using opposite Cloud Air and Hyunwoo Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloud Air position performs unexpectedly, Hyunwoo 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 Hyunwoo Industrial will offset losses from the drop in Hyunwoo Industrial's long position.| Cloud Air vs. CU Tech Corp | Cloud Air vs. Lion Chemtech Co | Cloud Air vs. Korea Information Communications | Cloud Air vs. V One Tech Co |
| Hyunwoo Industrial vs. Kbi Metal Co | Hyunwoo Industrial vs. Daejung Chemicals Metals | Hyunwoo Industrial vs. Asiana Airlines | Hyunwoo Industrial vs. Cloud Air CoLtd |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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