Correlation Between Korea Computer and Hyosung Heavy
Can any of the company-specific risk be diversified away by investing in both Korea Computer 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 Korea Computer and Hyosung Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Computer and Hyosung Heavy Industries, you can compare the effects of market volatilities on Korea Computer 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 Korea Computer with a short position of Hyosung Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Computer and Hyosung Heavy.
Diversification Opportunities for Korea Computer and Hyosung Heavy
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Hyosung is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Korea Computer 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 Korea Computer 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 Computer 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 Korea Computer i.e., Korea Computer and Hyosung Heavy go up and down completely randomly.
Pair Corralation between Korea Computer and Hyosung Heavy
Assuming the 90 days trading horizon Korea Computer is expected to generate 4.53 times less return on investment than Hyosung Heavy. But when comparing it to its historical volatility, Korea Computer is 1.48 times less risky than Hyosung Heavy. It trades about 0.03 of its potential returns per unit of risk. Hyosung Heavy Industries is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7,828,217 in Hyosung Heavy Industries on September 13, 2024 and sell it today you would earn a total of 35,871,783 from holding Hyosung Heavy Industries or generate 458.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Computer vs. Hyosung Heavy Industries
Performance |
| Timeline |
| Korea Computer |
| Hyosung Heavy Industries |
Korea Computer and Hyosung Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Computer and Hyosung Heavy
The main advantage of trading using opposite Korea Computer and Hyosung Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Computer 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.| Korea Computer vs. Cube Entertainment | Korea Computer vs. Dreamus Company | Korea Computer vs. LG Energy Solution | Korea Computer vs. Dongwon System |
| Hyosung Heavy vs. LG Energy Solution | Hyosung Heavy vs. Doosan Heavy Ind | Hyosung Heavy vs. Aprogen KIC | Hyosung Heavy vs. Korea Refract |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |