Correlation Between Korea Aerospace and Hyundai
Can any of the company-specific risk be diversified away by investing in both Korea Aerospace and Hyundai 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 Aerospace and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Aerospace Industries and Hyundai Motor Co, you can compare the effects of market volatilities on Korea Aerospace and Hyundai 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 Aerospace with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Aerospace and Hyundai.
Diversification Opportunities for Korea Aerospace and Hyundai
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Korea and Hyundai is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Korea Aerospace Industries and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Korea Aerospace 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 Aerospace Industries are associated (or correlated) with Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of Korea Aerospace i.e., Korea Aerospace and Hyundai go up and down completely randomly.
Pair Corralation between Korea Aerospace and Hyundai
Assuming the 90 days trading horizon Korea Aerospace Industries is expected to generate 1.74 times more return on investment than Hyundai. However, Korea Aerospace is 1.74 times more volatile than Hyundai Motor Co. It trades about 0.07 of its potential returns per unit of risk. Hyundai Motor Co is currently generating about -0.07 per unit of risk. If you would invest 5,740,000 in Korea Aerospace Industries on September 4, 2024 and sell it today you would earn a total of 220,000 from holding Korea Aerospace Industries or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Aerospace Industries vs. Hyundai Motor Co
Performance |
| Timeline |
| Korea Aerospace Indu |
| Hyundai Motor |
Korea Aerospace and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Aerospace and Hyundai
The main advantage of trading using opposite Korea Aerospace and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Aerospace position performs unexpectedly, Hyundai 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 will offset losses from the drop in Hyundai's long position.| Korea Aerospace vs. LG Display | Korea Aerospace vs. Hyundai Motor | Korea Aerospace vs. Hyundai Motor Co | Korea Aerospace vs. Hyundai Motor Co |
| Hyundai vs. Chin Yang Chemical | Hyundai vs. Chorokbaem Healthcare Co | Hyundai vs. Sung Bo Chemicals | Hyundai vs. LG Chemicals |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |