Correlation Between Hyundai Home and Hanil Chemical
Can any of the company-specific risk be diversified away by investing in both Hyundai Home and Hanil Chemical 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 Hanil Chemical 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 Hanil Chemical Ind, you can compare the effects of market volatilities on Hyundai Home and Hanil Chemical 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 Hanil Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Home and Hanil Chemical.
Diversification Opportunities for Hyundai Home and Hanil Chemical
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hyundai and Hanil is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Home Shopping and Hanil Chemical Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Chemical Ind 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 Hanil Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Chemical Ind has no effect on the direction of Hyundai Home i.e., Hyundai Home and Hanil Chemical go up and down completely randomly.
Pair Corralation between Hyundai Home and Hanil Chemical
Assuming the 90 days trading horizon Hyundai Home Shopping is expected to under-perform the Hanil Chemical. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Home Shopping is 1.46 times less risky than Hanil Chemical. The stock trades about -0.03 of its potential returns per unit of risk. The Hanil Chemical Ind is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,004,555 in Hanil Chemical Ind on October 22, 2024 and sell it today you would earn a total of 86,445 from holding Hanil Chemical Ind or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Home Shopping vs. Hanil Chemical Ind
Performance |
| Timeline |
| Hyundai Home Shopping |
| Hanil Chemical Ind |
Hyundai Home and Hanil Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Home and Hanil Chemical
The main advantage of trading using opposite Hyundai Home and Hanil Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Home position performs unexpectedly, Hanil Chemical 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 Hanil Chemical will offset losses from the drop in Hanil Chemical's long position.| Hyundai Home vs. Kukil Metal Co | Hyundai Home vs. Koryo Credit Information | Hyundai Home vs. Hyundai Industrial Co | Hyundai Home vs. Daejung Chemicals Metals |
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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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