Correlation Between INSUN Environmental and Hyosung Heavy
Can any of the company-specific risk be diversified away by investing in both INSUN Environmental and Hyosung 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 INSUN Environmental and Hyosung Heavy 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 Hyosung Heavy Industries, you can compare the effects of market volatilities on INSUN Environmental and Hyosung 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 INSUN Environmental with a short position of Hyosung Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSUN Environmental and Hyosung Heavy.
Diversification Opportunities for INSUN Environmental and Hyosung Heavy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INSUN and Hyosung is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding INSUN Environmental New and Hyosung Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Heavy Industries 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 Hyosung Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Heavy Industries has no effect on the direction of INSUN Environmental i.e., INSUN Environmental and Hyosung Heavy go up and down completely randomly.
Pair Corralation between INSUN Environmental and Hyosung Heavy
Assuming the 90 days trading horizon INSUN Environmental is expected to generate 5.52 times less return on investment than Hyosung Heavy. But when comparing it to its historical volatility, INSUN Environmental New is 2.56 times less risky than Hyosung Heavy. It trades about 0.06 of its potential returns per unit of risk. Hyosung Heavy Industries is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 40,650,000 in Hyosung Heavy Industries on November 3, 2024 and sell it today you would earn a total of 4,200,000 from holding Hyosung Heavy Industries or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSUN Environmental New vs. Hyosung Heavy Industries
Performance |
| Timeline |
| INSUN Environmental New |
| Hyosung Heavy Industries |
INSUN Environmental and Hyosung Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSUN Environmental and Hyosung Heavy
The main advantage of trading using opposite INSUN Environmental and Hyosung Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSUN Environmental position performs unexpectedly, Hyosung 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 Hyosung Heavy will offset losses from the drop in Hyosung Heavy'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 |
| Hyosung Heavy vs. LG Energy Solution | Hyosung Heavy vs. Doosan Heavy Ind | Hyosung Heavy vs. Aprogen KIC | Hyosung Heavy vs. SNTEnergy 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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