Correlation Between HSD Engine and Kukdong Oil
Can any of the company-specific risk be diversified away by investing in both HSD Engine and Kukdong Oil 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 HSD Engine and Kukdong Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSD Engine Co and Kukdong Oil Chemicals, you can compare the effects of market volatilities on HSD Engine and Kukdong Oil 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 HSD Engine with a short position of Kukdong Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSD Engine and Kukdong Oil.
Diversification Opportunities for HSD Engine and Kukdong Oil
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HSD and Kukdong is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding HSD Engine Co and Kukdong Oil Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdong Oil Chemicals and HSD Engine 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 HSD Engine Co are associated (or correlated) with Kukdong Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdong Oil Chemicals has no effect on the direction of HSD Engine i.e., HSD Engine and Kukdong Oil go up and down completely randomly.
Pair Corralation between HSD Engine and Kukdong Oil
Assuming the 90 days trading horizon HSD Engine Co is expected to generate 1.1 times more return on investment than Kukdong Oil. However, HSD Engine is 1.1 times more volatile than Kukdong Oil Chemicals. It trades about 0.06 of its potential returns per unit of risk. Kukdong Oil Chemicals is currently generating about 0.01 per unit of risk. If you would invest 749,000 in HSD Engine Co on September 5, 2024 and sell it today you would earn a total of 838,000 from holding HSD Engine Co or generate 111.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
HSD Engine Co vs. Kukdong Oil Chemicals
Performance |
| Timeline |
| HSD Engine |
| Kukdong Oil Chemicals |
HSD Engine and Kukdong Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSD Engine and Kukdong Oil
The main advantage of trading using opposite HSD Engine and Kukdong Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSD Engine position performs unexpectedly, Kukdong Oil 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 Kukdong Oil will offset losses from the drop in Kukdong Oil's long position.| HSD Engine vs. Kukdong Oil Chemicals | HSD Engine vs. PI Advanced Materials | HSD Engine vs. Lake Materials Co | HSD Engine vs. Dongnam Chemical Co |
| Kukdong Oil vs. AptaBio Therapeutics | Kukdong Oil vs. Daewoo SBI SPAC | Kukdong Oil vs. Dream Security co | Kukdong Oil vs. Microfriend |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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