Correlation Between GeneBioTech and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both GeneBioTech and Hyundai Engineering 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 GeneBioTech and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GeneBioTech Co and Hyundai Engineering Plastics, you can compare the effects of market volatilities on GeneBioTech and Hyundai Engineering 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 GeneBioTech with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of GeneBioTech and Hyundai Engineering.
Diversification Opportunities for GeneBioTech and Hyundai Engineering
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GeneBioTech and Hyundai is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding GeneBioTech Co and Hyundai Engineering Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and GeneBioTech 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 GeneBioTech Co are associated (or correlated) with Hyundai Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Engineering has no effect on the direction of GeneBioTech i.e., GeneBioTech and Hyundai Engineering go up and down completely randomly.
Pair Corralation between GeneBioTech and Hyundai Engineering
Assuming the 90 days trading horizon GeneBioTech Co is expected to generate 0.76 times more return on investment than Hyundai Engineering. However, GeneBioTech Co is 1.31 times less risky than Hyundai Engineering. It trades about -0.05 of its potential returns per unit of risk. Hyundai Engineering Plastics is currently generating about -0.04 per unit of risk. If you would invest 423,000 in GeneBioTech Co on September 21, 2024 and sell it today you would lose (82,000) from holding GeneBioTech Co or give up 19.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GeneBioTech Co vs. Hyundai Engineering Plastics
Performance |
| Timeline |
| GeneBioTech |
| Hyundai Engineering |
GeneBioTech and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GeneBioTech and Hyundai Engineering
The main advantage of trading using opposite GeneBioTech and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GeneBioTech position performs unexpectedly, Hyundai Engineering 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 Engineering will offset losses from the drop in Hyundai Engineering's long position.| GeneBioTech vs. Hyundai Engineering Plastics | GeneBioTech vs. Dongbu Insurance Co | GeneBioTech vs. Ssangyong Materials Corp | GeneBioTech vs. RF Materials Co |
| Hyundai Engineering vs. Daou Data Corp | Hyundai Engineering vs. Sangsangin Investment Securities | Hyundai Engineering vs. DSC Investment | Hyundai Engineering vs. NICE Information Service |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |