Correlation Between Hyundai Home and Next Entertainment
Can any of the company-specific risk be diversified away by investing in both Hyundai Home and Next Entertainment 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 Next Entertainment 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 Next Entertainment World, you can compare the effects of market volatilities on Hyundai Home and Next Entertainment 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 Next Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Home and Next Entertainment.
Diversification Opportunities for Hyundai Home and Next Entertainment
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Next is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Home Shopping and Next Entertainment World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Entertainment World 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 Next Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Entertainment World has no effect on the direction of Hyundai Home i.e., Hyundai Home and Next Entertainment go up and down completely randomly.
Pair Corralation between Hyundai Home and Next Entertainment
Assuming the 90 days trading horizon Hyundai Home Shopping is expected to generate 0.56 times more return on investment than Next Entertainment. However, Hyundai Home Shopping is 1.78 times less risky than Next Entertainment. It trades about -0.01 of its potential returns per unit of risk. Next Entertainment World is currently generating about -0.07 per unit of risk. If you would invest 5,253,107 in Hyundai Home Shopping on October 14, 2024 and sell it today you would lose (903,107) from holding Hyundai Home Shopping or give up 17.19% 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. Next Entertainment World
Performance |
| Timeline |
| Hyundai Home Shopping |
| Next Entertainment World |
Hyundai Home and Next Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Home and Next Entertainment
The main advantage of trading using opposite Hyundai Home and Next Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Home position performs unexpectedly, Next Entertainment 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 Next Entertainment will offset losses from the drop in Next Entertainment's 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 |
| Next Entertainment vs. Hyundai Home Shopping | Next Entertainment vs. Mobile Appliance | Next Entertainment vs. EV Advanced Material | Next Entertainment vs. Nable Communications |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |