Correlation Between Hyundai Home and Korea Electronic
Can any of the company-specific risk be diversified away by investing in both Hyundai Home and Korea Electronic 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 Korea Electronic 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 Korea Electronic Certification, you can compare the effects of market volatilities on Hyundai Home and Korea Electronic 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 Korea Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Home and Korea Electronic.
Diversification Opportunities for Hyundai Home and Korea Electronic
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Korea is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Home Shopping and Korea Electronic Certification in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electronic Cer 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 Korea Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electronic Cer has no effect on the direction of Hyundai Home i.e., Hyundai Home and Korea Electronic go up and down completely randomly.
Pair Corralation between Hyundai Home and Korea Electronic
Assuming the 90 days trading horizon Hyundai Home Shopping is expected to generate 0.9 times more return on investment than Korea Electronic. However, Hyundai Home Shopping is 1.11 times less risky than Korea Electronic. It trades about 0.03 of its potential returns per unit of risk. Korea Electronic Certification is currently generating about -0.08 per unit of risk. If you would invest 4,270,000 in Hyundai Home Shopping on September 25, 2024 and sell it today you would earn a total of 320,000 from holding Hyundai Home Shopping or generate 7.49% 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. Korea Electronic Certification
Performance |
| Timeline |
| Hyundai Home Shopping |
| Korea Electronic Cer |
Hyundai Home and Korea Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Home and Korea Electronic
The main advantage of trading using opposite Hyundai Home and Korea Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Home position performs unexpectedly, Korea Electronic 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 Korea Electronic will offset losses from the drop in Korea Electronic's long position.| Hyundai Home vs. KIWI Media Group | Hyundai Home vs. Pan Entertainment Co | Hyundai Home vs. Kbi Metal Co | Hyundai Home vs. SM Entertainment Co |
| Korea Electronic vs. Busan Industrial Co | Korea Electronic vs. Busan Ind | Korea Electronic vs. Mirae Asset Daewoo | Korea Electronic vs. Shinhan WTI Futures |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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