Correlation Between Wonbang Tech and Hyosung Heavy
Can any of the company-specific risk be diversified away by investing in both Wonbang Tech and Hyosung 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 Wonbang Tech and Hyosung Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonbang Tech Co and Hyosung Heavy Industries, you can compare the effects of market volatilities on Wonbang Tech and Hyosung 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 Wonbang Tech with a short position of Hyosung Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonbang Tech and Hyosung Heavy.
Diversification Opportunities for Wonbang Tech and Hyosung Heavy
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wonbang and Hyosung is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wonbang Tech Co and Hyosung Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Heavy Industries and Wonbang Tech 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 Wonbang Tech Co are associated (or correlated) with Hyosung Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Heavy Industries has no effect on the direction of Wonbang Tech i.e., Wonbang Tech and Hyosung Heavy go up and down completely randomly.
Pair Corralation between Wonbang Tech and Hyosung Heavy
Assuming the 90 days trading horizon Wonbang Tech is expected to generate 3.53 times less return on investment than Hyosung Heavy. But when comparing it to its historical volatility, Wonbang Tech Co is 1.07 times less risky than Hyosung Heavy. It trades about 0.04 of its potential returns per unit of risk. Hyosung Heavy Industries is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6,754,914 in Hyosung Heavy Industries on November 27, 2024 and sell it today you would earn a total of 39,095,086 from holding Hyosung Heavy Industries or generate 578.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wonbang Tech Co vs. Hyosung Heavy Industries
Performance |
| Timeline |
| Wonbang Tech |
| Hyosung Heavy Industries |
Wonbang Tech and Hyosung Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonbang Tech and Hyosung Heavy
The main advantage of trading using opposite Wonbang Tech and Hyosung Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonbang Tech position performs unexpectedly, Hyosung 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 Hyosung Heavy will offset losses from the drop in Hyosung Heavy's long position.| Wonbang Tech vs. Display Tech Co | Wonbang Tech vs. Inzi Display CoLtd | Wonbang Tech vs. Sangsin Energy Display | Wonbang Tech vs. DoubleU Games Co |
| Hyosung Heavy vs. Miwon Chemicals Co | Hyosung Heavy vs. Lotte Rental Co | Hyosung Heavy vs. JYP Entertainment Corp | Hyosung Heavy vs. SK Chemicals 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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