Correlation Between Hyundai Home and JNK Heaters
Can any of the company-specific risk be diversified away by investing in both Hyundai Home and JNK Heaters 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 JNK Heaters 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 JNK Heaters Co, you can compare the effects of market volatilities on Hyundai Home and JNK Heaters 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 JNK Heaters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Home and JNK Heaters.
Diversification Opportunities for Hyundai Home and JNK Heaters
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hyundai and JNK is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Home Shopping and JNK Heaters Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JNK Heaters 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 JNK Heaters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JNK Heaters has no effect on the direction of Hyundai Home i.e., Hyundai Home and JNK Heaters go up and down completely randomly.
Pair Corralation between Hyundai Home and JNK Heaters
Assuming the 90 days trading horizon Hyundai Home Shopping is expected to under-perform the JNK Heaters. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Home Shopping is 1.91 times less risky than JNK Heaters. The stock trades about -0.21 of its potential returns per unit of risk. The JNK Heaters Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 334,500 in JNK Heaters Co on October 22, 2024 and sell it today you would earn a total of 32,500 from holding JNK Heaters Co or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Home Shopping vs. JNK Heaters Co
Performance |
| Timeline |
| Hyundai Home Shopping |
| JNK Heaters |
Hyundai Home and JNK Heaters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Home and JNK Heaters
The main advantage of trading using opposite Hyundai Home and JNK Heaters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Home position performs unexpectedly, JNK Heaters 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 JNK Heaters will offset losses from the drop in JNK Heaters' 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 |
| JNK Heaters vs. DB Insurance Co | JNK Heaters vs. RFTech Co | JNK Heaters vs. Narae Nanotech Corp | JNK Heaters vs. KMH Hitech 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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