Correlation Between Mobile Appliance and Hyundai Home
Can any of the company-specific risk be diversified away by investing in both Mobile Appliance and Hyundai Home 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 Mobile Appliance and Hyundai Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobile Appliance and Hyundai Home Shopping, you can compare the effects of market volatilities on Mobile Appliance and Hyundai Home 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 Mobile Appliance with a short position of Hyundai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobile Appliance and Hyundai Home.
Diversification Opportunities for Mobile Appliance and Hyundai Home
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mobile and Hyundai is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mobile Appliance and Hyundai Home Shopping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Home Shopping and Mobile Appliance 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 Mobile Appliance are associated (or correlated) with Hyundai Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Home Shopping has no effect on the direction of Mobile Appliance i.e., Mobile Appliance and Hyundai Home go up and down completely randomly.
Pair Corralation between Mobile Appliance and Hyundai Home
Assuming the 90 days trading horizon Mobile Appliance is expected to generate 1.2 times more return on investment than Hyundai Home. However, Mobile Appliance is 1.2 times more volatile than Hyundai Home Shopping. It trades about 0.31 of its potential returns per unit of risk. Hyundai Home Shopping is currently generating about 0.1 per unit of risk. If you would invest 201,500 in Mobile Appliance on October 30, 2024 and sell it today you would earn a total of 25,500 from holding Mobile Appliance or generate 12.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobile Appliance vs. Hyundai Home Shopping
Performance |
| Timeline |
| Mobile Appliance |
| Hyundai Home Shopping |
Mobile Appliance and Hyundai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobile Appliance and Hyundai Home
The main advantage of trading using opposite Mobile Appliance and Hyundai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobile Appliance position performs unexpectedly, Hyundai Home 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 Home will offset losses from the drop in Hyundai Home's long position.| Mobile Appliance vs. Polaris Office Corp | Mobile Appliance vs. Sempio Foods Co | Mobile Appliance vs. Samlip General Foods | Mobile Appliance vs. Digital Power Communications |
| Hyundai Home vs. Daewoo Electronic Components | Hyundai Home vs. Jahwa Electronics Co | Hyundai Home vs. PJ Electronics Co | Hyundai Home vs. Dongbang Transport Logistics |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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