Correlation Between Hyundai Home and KCC
Can any of the company-specific risk be diversified away by investing in both Hyundai Home and KCC 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 Home and KCC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Home Shopping and KCC Corporation, you can compare the effects of market volatilities on Hyundai Home and KCC 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 Home with a short position of KCC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Home and KCC.
Diversification Opportunities for Hyundai Home and KCC
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and KCC is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Home Shopping and KCC Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCC Corporation and Hyundai Home 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 Home Shopping are associated (or correlated) with KCC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCC Corporation has no effect on the direction of Hyundai Home i.e., Hyundai Home and KCC go up and down completely randomly.
Pair Corralation between Hyundai Home and KCC
Assuming the 90 days trading horizon Hyundai Home Shopping is expected to under-perform the KCC. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Home Shopping is 1.5 times less risky than KCC. The stock trades about -0.01 of its potential returns per unit of risk. The KCC Corporation is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 21,131,200 in KCC Corporation on September 12, 2024 and sell it today you would earn a total of 2,318,800 from holding KCC Corporation or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Home Shopping vs. KCC Corp.
Performance |
| Timeline |
| Hyundai Home Shopping |
| KCC Corporation |
Hyundai Home and KCC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Home and KCC
The main advantage of trading using opposite Hyundai Home and KCC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Home position performs unexpectedly, KCC 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 KCC will offset losses from the drop in KCC's long position.| Hyundai Home vs. Samsung Electronics Co | Hyundai Home vs. Samsung Electronics Co | Hyundai Home vs. SK Hynix | Hyundai Home vs. POSCO Holdings |
| KCC vs. Cuckoo Homesys Co | KCC vs. Hyundai Home Shopping | KCC vs. Korea Investment Holdings | KCC vs. Samyung Trading 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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