Correlation Between Dong A and Hyundai Heavy
Can any of the company-specific risk be diversified away by investing in both Dong A and Hyundai Heavy 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 Dong A and Hyundai Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dong A Steel Technology and Hyundai Heavy Industries, you can compare the effects of market volatilities on Dong A and Hyundai Heavy 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 Dong A with a short position of Hyundai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dong A and Hyundai Heavy.
Diversification Opportunities for Dong A and Hyundai Heavy
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dong and Hyundai is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Dong A Steel Technology and Hyundai Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Heavy Industries and Dong A 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 Dong A Steel Technology are associated (or correlated) with Hyundai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Heavy Industries has no effect on the direction of Dong A i.e., Dong A and Hyundai Heavy go up and down completely randomly.
Pair Corralation between Dong A and Hyundai Heavy
Assuming the 90 days trading horizon Dong A is expected to generate 1.05 times less return on investment than Hyundai Heavy. In addition to that, Dong A is 1.84 times more volatile than Hyundai Heavy Industries. It trades about 0.02 of its total potential returns per unit of risk. Hyundai Heavy Industries is currently generating about 0.04 per unit of volatility. If you would invest 7,950,000 in Hyundai Heavy Industries on October 14, 2024 and sell it today you would earn a total of 310,000 from holding Hyundai Heavy Industries or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dong A Steel Technology vs. Hyundai Heavy Industries
Performance |
| Timeline |
| Dong A Steel |
| Hyundai Heavy Industries |
Dong A and Hyundai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dong A and Hyundai Heavy
The main advantage of trading using opposite Dong A and Hyundai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dong A position performs unexpectedly, Hyundai Heavy 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 Hyundai Heavy will offset losses from the drop in Hyundai Heavy's long position.| Dong A vs. GS Retail Co | Dong A vs. Air Busan Co | Dong A vs. Chorokbaem Healthcare Co | Dong A vs. ABOV Semiconductor Co |
| Hyundai Heavy vs. Digital Imaging Technology | Hyundai Heavy vs. Eagle Veterinary Technology | Hyundai Heavy vs. Dongbang Transport Logistics | Hyundai Heavy vs. Dong A Steel Technology |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |