Correlation Between HYUNDAI BIOLAND and Korea Electronic
Can any of the company-specific risk be diversified away by investing in both HYUNDAI BIOLAND and Korea Electronic 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 HYUNDAI BIOLAND and Korea Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HYUNDAI BIOLAND CoLtd and Korea Electronic Certification, you can compare the effects of market volatilities on HYUNDAI BIOLAND and Korea Electronic 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 HYUNDAI BIOLAND with a short position of Korea Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYUNDAI BIOLAND and Korea Electronic.
Diversification Opportunities for HYUNDAI BIOLAND and Korea Electronic
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between HYUNDAI and Korea is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding HYUNDAI BIOLAND CoLtd and Korea Electronic Certification in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electronic Cer and HYUNDAI BIOLAND 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 HYUNDAI BIOLAND CoLtd are associated (or correlated) with Korea Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electronic Cer has no effect on the direction of HYUNDAI BIOLAND i.e., HYUNDAI BIOLAND and Korea Electronic go up and down completely randomly.
Pair Corralation between HYUNDAI BIOLAND and Korea Electronic
Assuming the 90 days trading horizon HYUNDAI BIOLAND CoLtd is expected to under-perform the Korea Electronic. In addition to that, HYUNDAI BIOLAND is 1.1 times more volatile than Korea Electronic Certification. It trades about -0.42 of its total potential returns per unit of risk. Korea Electronic Certification is currently generating about -0.19 per unit of volatility. If you would invest 333,000 in Korea Electronic Certification on September 3, 2024 and sell it today you would lose (24,000) from holding Korea Electronic Certification or give up 7.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYUNDAI BIOLAND CoLtd vs. Korea Electronic Certification
Performance |
| Timeline |
| HYUNDAI BIOLAND CoLtd |
| Korea Electronic Cer |
HYUNDAI BIOLAND and Korea Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYUNDAI BIOLAND and Korea Electronic
The main advantage of trading using opposite HYUNDAI BIOLAND and Korea Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYUNDAI BIOLAND position performs unexpectedly, Korea Electronic 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 Korea Electronic will offset losses from the drop in Korea Electronic's long position.| HYUNDAI BIOLAND vs. LG Display | HYUNDAI BIOLAND vs. Hyundai Motor | HYUNDAI BIOLAND vs. Hyundai Motor Co | HYUNDAI BIOLAND vs. Hyundai Motor Co |
| Korea Electronic vs. LG Display | Korea Electronic vs. Hyundai Motor | Korea Electronic vs. Hyundai Motor Co | Korea Electronic vs. Hyundai Motor 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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