Correlation Between Hyundai Home and EBEST Investment
Can any of the company-specific risk be diversified away by investing in both Hyundai Home and EBEST Investment 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 EBEST Investment 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 EBEST Investment Securities, you can compare the effects of market volatilities on Hyundai Home and EBEST Investment 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 EBEST Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Home and EBEST Investment.
Diversification Opportunities for Hyundai Home and EBEST Investment
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and EBEST is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Home Shopping and EBEST Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBEST Investment Sec 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 EBEST Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBEST Investment Sec has no effect on the direction of Hyundai Home i.e., Hyundai Home and EBEST Investment go up and down completely randomly.
Pair Corralation between Hyundai Home and EBEST Investment
Assuming the 90 days trading horizon Hyundai Home Shopping is expected to under-perform the EBEST Investment. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Home Shopping is 1.23 times less risky than EBEST Investment. The stock trades about -0.11 of its potential returns per unit of risk. The EBEST Investment Securities is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 448,500 in EBEST Investment Securities on September 3, 2024 and sell it today you would lose (53,000) from holding EBEST Investment Securities or give up 11.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Home Shopping vs. EBEST Investment Securities
Performance |
| Timeline |
| Hyundai Home Shopping |
| EBEST Investment Sec |
Hyundai Home and EBEST Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Home and EBEST Investment
The main advantage of trading using opposite Hyundai Home and EBEST Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Home position performs unexpectedly, EBEST Investment 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 EBEST Investment will offset losses from the drop in EBEST Investment's long position.| Hyundai Home vs. Nice Information Telecommunication | Hyundai Home vs. Hanmi Semiconductor Co | Hyundai Home vs. Youngsin Metal Industrial | Hyundai Home vs. Daedong Metals Co |
| EBEST Investment vs. Worldex Industry Trading | EBEST Investment vs. Woori Technology Investment | EBEST Investment vs. SBI Investment KOREA | EBEST Investment vs. Lindeman Asia Investment |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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