Correlation Between Hyundai Home and Derkwoo Electronics
Can any of the company-specific risk be diversified away by investing in both Hyundai Home and Derkwoo 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 Derkwoo 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 Derkwoo Electronics Co, you can compare the effects of market volatilities on Hyundai Home and Derkwoo 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 Derkwoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Home and Derkwoo Electronics.
Diversification Opportunities for Hyundai Home and Derkwoo Electronics
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Derkwoo is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Home Shopping and Derkwoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derkwoo 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 Derkwoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derkwoo Electronics has no effect on the direction of Hyundai Home i.e., Hyundai Home and Derkwoo Electronics go up and down completely randomly.
Pair Corralation between Hyundai Home and Derkwoo Electronics
Assuming the 90 days trading horizon Hyundai Home Shopping is expected to generate 0.56 times more return on investment than Derkwoo Electronics. However, Hyundai Home Shopping is 1.78 times less risky than Derkwoo Electronics. It trades about 0.01 of its potential returns per unit of risk. Derkwoo Electronics Co is currently generating about -0.06 per unit of risk. If you would invest 4,498,621 in Hyundai Home Shopping on September 25, 2024 and sell it today you would earn a total of 91,379 from holding Hyundai Home Shopping or generate 2.03% 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. Derkwoo Electronics Co
Performance |
| Timeline |
| Hyundai Home Shopping |
| Derkwoo Electronics |
Hyundai Home and Derkwoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Home and Derkwoo Electronics
The main advantage of trading using opposite Hyundai Home and Derkwoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Home position performs unexpectedly, Derkwoo 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 Derkwoo Electronics will offset losses from the drop in Derkwoo Electronics' long position.| Hyundai Home vs. KIWI Media Group | Hyundai Home vs. Pan Entertainment Co | Hyundai Home vs. Kbi Metal Co | Hyundai Home vs. SM Entertainment Co |
| Derkwoo Electronics vs. Youngsin Metal Industrial | Derkwoo Electronics vs. Haesung Industrial Co | Derkwoo Electronics vs. Daiyang Metal Co | Derkwoo Electronics vs. ITM Semiconductor 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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