Correlation Between Hyundai Home and RS Automation
Can any of the company-specific risk be diversified away by investing in both Hyundai Home and RS Automation 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 RS Automation 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 RS Automation CoLtd, you can compare the effects of market volatilities on Hyundai Home and RS Automation 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 RS Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Home and RS Automation.
Diversification Opportunities for Hyundai Home and RS Automation
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and 140670 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Home Shopping and RS Automation CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RS Automation CoLtd 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 RS Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RS Automation CoLtd has no effect on the direction of Hyundai Home i.e., Hyundai Home and RS Automation go up and down completely randomly.
Pair Corralation between Hyundai Home and RS Automation
Assuming the 90 days trading horizon Hyundai Home is expected to generate 7.78 times less return on investment than RS Automation. But when comparing it to its historical volatility, Hyundai Home Shopping is 3.08 times less risky than RS Automation. It trades about 0.04 of its potential returns per unit of risk. RS Automation CoLtd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,063,000 in RS Automation CoLtd on November 3, 2024 and sell it today you would earn a total of 576,000 from holding RS Automation CoLtd or generate 54.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Home Shopping vs. RS Automation CoLtd
Performance |
| Timeline |
| Hyundai Home Shopping |
| RS Automation CoLtd |
Hyundai Home and RS Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Home and RS Automation
The main advantage of trading using opposite Hyundai Home and RS Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Home position performs unexpectedly, RS Automation 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 RS Automation will offset losses from the drop in RS Automation's long position.| Hyundai Home vs. Daishin Information Communications | Hyundai Home vs. DB Insurance Co | Hyundai Home vs. Incar Financial Service | Hyundai Home vs. Shinhan Financial Group |
| RS Automation vs. Dongwoo Farm To | RS Automation vs. Nam Hwa Construction | RS Automation vs. BGF Retail Co | RS Automation vs. Shinsegae Engineering Construction |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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