Correlation Between Hyundai Home and Cosmecca Korea
Can any of the company-specific risk be diversified away by investing in both Hyundai Home and Cosmecca Korea 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 Cosmecca Korea 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 Cosmecca Korea Co, you can compare the effects of market volatilities on Hyundai Home and Cosmecca Korea 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 Cosmecca Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Home and Cosmecca Korea.
Diversification Opportunities for Hyundai Home and Cosmecca Korea
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Cosmecca is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Home Shopping and Cosmecca Korea Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmecca Korea 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 Cosmecca Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmecca Korea has no effect on the direction of Hyundai Home i.e., Hyundai Home and Cosmecca Korea go up and down completely randomly.
Pair Corralation between Hyundai Home and Cosmecca Korea
Assuming the 90 days trading horizon Hyundai Home Shopping is expected to under-perform the Cosmecca Korea. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Home Shopping is 2.95 times less risky than Cosmecca Korea. The stock trades about -0.08 of its potential returns per unit of risk. The Cosmecca Korea Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 5,980,000 in Cosmecca Korea Co on September 2, 2024 and sell it today you would lose (950,000) from holding Cosmecca Korea Co or give up 15.89% 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. Cosmecca Korea Co
Performance |
| Timeline |
| Hyundai Home Shopping |
| Cosmecca Korea |
Hyundai Home and Cosmecca Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Home and Cosmecca Korea
The main advantage of trading using opposite Hyundai Home and Cosmecca Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Home position performs unexpectedly, Cosmecca Korea 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 Cosmecca Korea will offset losses from the drop in Cosmecca Korea's long position.| Hyundai Home vs. AptaBio Therapeutics | Hyundai Home vs. Daewoo SBI SPAC | Hyundai Home vs. Dream Security co | Hyundai Home vs. Microfriend |
| Cosmecca Korea vs. Shinsegae Information Communication | Cosmecca Korea vs. Daishin Information Communications | Cosmecca Korea vs. Daou Data Corp | Cosmecca Korea vs. Jeong Moon Information |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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