Correlation Between ICD Co and HYUNDAI BIOLAND
Can any of the company-specific risk be diversified away by investing in both ICD Co and HYUNDAI BIOLAND 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 ICD Co and HYUNDAI BIOLAND into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICD Co and HYUNDAI BIOLAND CoLtd, you can compare the effects of market volatilities on ICD Co and HYUNDAI BIOLAND 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 ICD Co with a short position of HYUNDAI BIOLAND. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICD Co and HYUNDAI BIOLAND.
Diversification Opportunities for ICD Co and HYUNDAI BIOLAND
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ICD and HYUNDAI is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding ICD Co and HYUNDAI BIOLAND CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYUNDAI BIOLAND CoLtd and ICD Co 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 ICD Co are associated (or correlated) with HYUNDAI BIOLAND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYUNDAI BIOLAND CoLtd has no effect on the direction of ICD Co i.e., ICD Co and HYUNDAI BIOLAND go up and down completely randomly.
Pair Corralation between ICD Co and HYUNDAI BIOLAND
Assuming the 90 days trading horizon ICD Co is expected to generate 1.18 times more return on investment than HYUNDAI BIOLAND. However, ICD Co is 1.18 times more volatile than HYUNDAI BIOLAND CoLtd. It trades about -0.15 of its potential returns per unit of risk. HYUNDAI BIOLAND CoLtd is currently generating about -0.2 per unit of risk. If you would invest 564,000 in ICD Co on September 13, 2024 and sell it today you would lose (112,000) from holding ICD Co or give up 19.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
ICD Co vs. HYUNDAI BIOLAND CoLtd
Performance |
| Timeline |
| ICD Co |
| HYUNDAI BIOLAND CoLtd |
ICD Co and HYUNDAI BIOLAND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICD Co and HYUNDAI BIOLAND
The main advantage of trading using opposite ICD Co and HYUNDAI BIOLAND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICD Co position performs unexpectedly, HYUNDAI BIOLAND 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 BIOLAND will offset losses from the drop in HYUNDAI BIOLAND's long position.| ICD Co vs. SFA Engineering | ICD Co vs. APS Holdings | ICD Co vs. Soulbrain Holdings Co | ICD Co vs. JUSUNG ENGINEERING Co |
| HYUNDAI BIOLAND vs. Korea Alcohol Industrial | HYUNDAI BIOLAND vs. Dongbang Transport Logistics | HYUNDAI BIOLAND vs. Daewon Media Co | HYUNDAI BIOLAND vs. Seoul Semiconductor 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.
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