Correlation Between Hyundai Home and Choil Aluminum
Can any of the company-specific risk be diversified away by investing in both Hyundai Home and Choil Aluminum 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 Choil Aluminum 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 Choil Aluminum, you can compare the effects of market volatilities on Hyundai Home and Choil Aluminum 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 Choil Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Home and Choil Aluminum.
Diversification Opportunities for Hyundai Home and Choil Aluminum
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hyundai and Choil is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Home Shopping and Choil Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choil Aluminum 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 Choil Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choil Aluminum has no effect on the direction of Hyundai Home i.e., Hyundai Home and Choil Aluminum go up and down completely randomly.
Pair Corralation between Hyundai Home and Choil Aluminum
Assuming the 90 days trading horizon Hyundai Home Shopping is expected to generate 0.52 times more return on investment than Choil Aluminum. However, Hyundai Home Shopping is 1.94 times less risky than Choil Aluminum. It trades about 0.0 of its potential returns per unit of risk. Choil Aluminum is currently generating about -0.01 per unit of risk. If you would invest 5,149,365 in Hyundai Home Shopping on October 30, 2024 and sell it today you would lose (469,365) from holding Hyundai Home Shopping or give up 9.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Home Shopping vs. Choil Aluminum
Performance |
| Timeline |
| Hyundai Home Shopping |
| Choil Aluminum |
Hyundai Home and Choil Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Home and Choil Aluminum
The main advantage of trading using opposite Hyundai Home and Choil Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Home position performs unexpectedly, Choil Aluminum 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 Choil Aluminum will offset losses from the drop in Choil Aluminum's long position.| Hyundai Home vs. Daewoo Electronic Components | Hyundai Home vs. Jahwa Electronics Co | Hyundai Home vs. PJ Electronics Co | Hyundai Home vs. Dongbang Transport Logistics |
| Choil Aluminum vs. Hotel Shilla Co | Choil Aluminum vs. Lotte Data Communication | Choil Aluminum vs. NICE Information Service | Choil Aluminum vs. Insung Information 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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