Correlation Between Koryo Credit and Hyundai Heavy
Can any of the company-specific risk be diversified away by investing in both Koryo Credit and Hyundai Heavy 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 Koryo Credit and Hyundai Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koryo Credit Information and Hyundai Heavy Industries, you can compare the effects of market volatilities on Koryo Credit and Hyundai Heavy 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 Koryo Credit with a short position of Hyundai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koryo Credit and Hyundai Heavy.
Diversification Opportunities for Koryo Credit and Hyundai Heavy
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Koryo and Hyundai is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Koryo Credit Information and Hyundai Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Heavy Industries and Koryo Credit 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 Koryo Credit Information are associated (or correlated) with Hyundai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Heavy Industries has no effect on the direction of Koryo Credit i.e., Koryo Credit and Hyundai Heavy go up and down completely randomly.
Pair Corralation between Koryo Credit and Hyundai Heavy
Assuming the 90 days trading horizon Koryo Credit is expected to generate 30.95 times less return on investment than Hyundai Heavy. But when comparing it to its historical volatility, Koryo Credit Information is 1.87 times less risky than Hyundai Heavy. It trades about 0.0 of its potential returns per unit of risk. Hyundai Heavy Industries is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,650,000 in Hyundai Heavy Industries on August 29, 2024 and sell it today you would earn a total of 360,000 from holding Hyundai Heavy Industries or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koryo Credit Information vs. Hyundai Heavy Industries
Performance |
| Timeline |
| Koryo Credit Information |
| Hyundai Heavy Industries |
Koryo Credit and Hyundai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koryo Credit and Hyundai Heavy
The main advantage of trading using opposite Koryo Credit and Hyundai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koryo Credit position performs unexpectedly, Hyundai Heavy 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 Heavy will offset losses from the drop in Hyundai Heavy's long position.| Koryo Credit vs. NICE Information Service | Koryo Credit vs. Lotte Chilsung Beverage | Koryo Credit vs. TOPMATERIAL LTD | Koryo Credit vs. Samyang Foods Co |
| Hyundai Heavy vs. Infinitt Healthcare Co | Hyundai Heavy vs. Koryo Credit Information | Hyundai Heavy vs. SCI Information Service | Hyundai Heavy vs. CU Medical Systems |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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