Correlation Between INSUN Environmental and Hyundai BNG
Can any of the company-specific risk be diversified away by investing in both INSUN Environmental and Hyundai BNG 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 INSUN Environmental and Hyundai BNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSUN Environmental New and Hyundai BNG Steel, you can compare the effects of market volatilities on INSUN Environmental and Hyundai BNG 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 INSUN Environmental with a short position of Hyundai BNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSUN Environmental and Hyundai BNG.
Diversification Opportunities for INSUN Environmental and Hyundai BNG
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INSUN and Hyundai is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding INSUN Environmental New and Hyundai BNG Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai BNG Steel and INSUN Environmental 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 INSUN Environmental New are associated (or correlated) with Hyundai BNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai BNG Steel has no effect on the direction of INSUN Environmental i.e., INSUN Environmental and Hyundai BNG go up and down completely randomly.
Pair Corralation between INSUN Environmental and Hyundai BNG
Assuming the 90 days trading horizon INSUN Environmental New is expected to under-perform the Hyundai BNG. But the stock apears to be less risky and, when comparing its historical volatility, INSUN Environmental New is 2.37 times less risky than Hyundai BNG. The stock trades about -0.05 of its potential returns per unit of risk. The Hyundai BNG Steel is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,097,000 in Hyundai BNG Steel on November 2, 2024 and sell it today you would earn a total of 161,000 from holding Hyundai BNG Steel or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSUN Environmental New vs. Hyundai BNG Steel
Performance |
| Timeline |
| INSUN Environmental New |
| Hyundai BNG Steel |
INSUN Environmental and Hyundai BNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSUN Environmental and Hyundai BNG
The main advantage of trading using opposite INSUN Environmental and Hyundai BNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSUN Environmental position performs unexpectedly, Hyundai BNG 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 BNG will offset losses from the drop in Hyundai BNG's long position.| INSUN Environmental vs. Korea Environment Technology | INSUN Environmental vs. Paradise Co | INSUN Environmental vs. Seoul Semiconductor Co | INSUN Environmental vs. JUSUNG ENGINEERING Co |
| Hyundai BNG vs. Cuckoo Electronics Co | Hyundai BNG vs. Samsung Electronics Co | Hyundai BNG vs. KyungIn Electronics Co | Hyundai BNG vs. Sungmoon Electronics 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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