Correlation Between Hyundai Home and Wave Electronics
Can any of the company-specific risk be diversified away by investing in both Hyundai Home and Wave Electronics 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 Wave Electronics 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 Wave Electronics Co, you can compare the effects of market volatilities on Hyundai Home and Wave Electronics 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 Wave Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Home and Wave Electronics.
Diversification Opportunities for Hyundai Home and Wave Electronics
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Wave is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Home Shopping and Wave Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wave Electronics 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 Wave Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wave Electronics has no effect on the direction of Hyundai Home i.e., Hyundai Home and Wave Electronics go up and down completely randomly.
Pair Corralation between Hyundai Home and Wave Electronics
Assuming the 90 days trading horizon Hyundai Home Shopping is expected to under-perform the Wave Electronics. In addition to that, Hyundai Home is 1.14 times more volatile than Wave Electronics Co. It trades about -0.12 of its total potential returns per unit of risk. Wave Electronics Co is currently generating about 0.24 per unit of volatility. If you would invest 369,500 in Wave Electronics Co on October 13, 2024 and sell it today you would earn a total of 23,500 from holding Wave Electronics Co or generate 6.36% 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. Wave Electronics Co
Performance |
| Timeline |
| Hyundai Home Shopping |
| Wave Electronics |
Hyundai Home and Wave Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Home and Wave Electronics
The main advantage of trading using opposite Hyundai Home and Wave Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Home position performs unexpectedly, Wave Electronics 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 Wave Electronics will offset losses from the drop in Wave Electronics' long position.| Hyundai Home vs. ECSTELECOM Co | Hyundai Home vs. SK Telecom Co | Hyundai Home vs. Handok Clean Tech | Hyundai Home vs. Ssangyong Information Communication |
| Wave Electronics vs. DRB Industrial Co | Wave Electronics vs. Korea Steel Co | Wave Electronics vs. Hwasung Industrial Co | Wave Electronics vs. Hankuk Steel Wire |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |