Correlation Between MEDICOX and Hyundai Industrial
Can any of the company-specific risk be diversified away by investing in both MEDICOX and Hyundai Industrial 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 MEDICOX and Hyundai Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICOX Co and Hyundai Industrial Co, you can compare the effects of market volatilities on MEDICOX and Hyundai Industrial 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 MEDICOX with a short position of Hyundai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICOX and Hyundai Industrial.
Diversification Opportunities for MEDICOX and Hyundai Industrial
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MEDICOX and Hyundai is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding MEDICOX Co and Hyundai Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Industrial and MEDICOX 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 MEDICOX Co are associated (or correlated) with Hyundai Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Industrial has no effect on the direction of MEDICOX i.e., MEDICOX and Hyundai Industrial go up and down completely randomly.
Pair Corralation between MEDICOX and Hyundai Industrial
Assuming the 90 days trading horizon MEDICOX Co is expected to generate 4.64 times more return on investment than Hyundai Industrial. However, MEDICOX is 4.64 times more volatile than Hyundai Industrial Co. It trades about -0.03 of its potential returns per unit of risk. Hyundai Industrial Co is currently generating about -0.21 per unit of risk. If you would invest 41,100 in MEDICOX Co on August 29, 2024 and sell it today you would lose (6,100) from holding MEDICOX Co or give up 14.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDICOX Co vs. Hyundai Industrial Co
Performance |
| Timeline |
| MEDICOX |
| Hyundai Industrial |
MEDICOX and Hyundai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICOX and Hyundai Industrial
The main advantage of trading using opposite MEDICOX and Hyundai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICOX position performs unexpectedly, Hyundai Industrial 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 Industrial will offset losses from the drop in Hyundai Industrial's long position.| MEDICOX vs. Vitzro Tech Co | MEDICOX vs. Busan Industrial Co | MEDICOX vs. Busan Ind | MEDICOX vs. Shinhan WTI Futures |
| Hyundai Industrial vs. KMH Hitech Co | Hyundai Industrial vs. GemVaxKAEL CoLtd | Hyundai Industrial vs. Busan Industrial Co | Hyundai Industrial vs. Busan Ind |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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