Correlation Between KMH Hitech and Hyundai Heavy
Can any of the company-specific risk be diversified away by investing in both KMH Hitech 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 KMH Hitech and Hyundai Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KMH Hitech Co and Hyundai Heavy Industries, you can compare the effects of market volatilities on KMH Hitech 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 KMH Hitech with a short position of Hyundai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Hyundai Heavy.
Diversification Opportunities for KMH Hitech and Hyundai Heavy
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KMH and Hyundai is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co 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 KMH Hitech 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 KMH Hitech Co 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 KMH Hitech i.e., KMH Hitech and Hyundai Heavy go up and down completely randomly.
Pair Corralation between KMH Hitech and Hyundai Heavy
Assuming the 90 days trading horizon KMH Hitech Co is expected to under-perform the Hyundai Heavy. In addition to that, KMH Hitech is 1.22 times more volatile than Hyundai Heavy Industries. It trades about -0.03 of its total potential returns per unit of risk. Hyundai Heavy Industries is currently generating about 0.07 per unit of volatility. If you would invest 5,661,503 in Hyundai Heavy Industries on September 1, 2024 and sell it today you would earn a total of 2,118,497 from holding Hyundai Heavy Industries or generate 37.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KMH Hitech Co vs. Hyundai Heavy Industries
Performance |
| Timeline |
| KMH Hitech |
| Hyundai Heavy Industries |
KMH Hitech and Hyundai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and Hyundai Heavy
The main advantage of trading using opposite KMH Hitech and Hyundai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech 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.| KMH Hitech vs. Dongsin Engineering Construction | KMH Hitech vs. Doosan Fuel Cell | KMH Hitech vs. Daishin Balance 1 | KMH Hitech vs. Total Soft Bank |
| Hyundai Heavy vs. Union Materials Corp | Hyundai Heavy vs. Daejoo Electronic Materials | Hyundai Heavy vs. Ecoplastic | Hyundai Heavy vs. Netmarble Games Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |