Correlation Between Dongwoo Farm and Hyundai Home
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm 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 Dongwoo Farm and Hyundai Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwoo Farm To and Hyundai Home Shopping, you can compare the effects of market volatilities on Dongwoo Farm 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 Dongwoo Farm with a short position of Hyundai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and Hyundai Home.
Diversification Opportunities for Dongwoo Farm and Hyundai Home
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dongwoo and Hyundai is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To 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 Dongwoo Farm 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 Dongwoo Farm To 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 Dongwoo Farm i.e., Dongwoo Farm and Hyundai Home go up and down completely randomly.
Pair Corralation between Dongwoo Farm and Hyundai Home
Assuming the 90 days trading horizon Dongwoo Farm is expected to generate 2.99 times less return on investment than Hyundai Home. But when comparing it to its historical volatility, Dongwoo Farm To is 1.96 times less risky than Hyundai Home. It trades about 0.07 of its potential returns per unit of risk. Hyundai Home Shopping is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,540,000 in Hyundai Home Shopping on October 30, 2024 and sell it today you would earn a total of 140,000 from holding Hyundai Home Shopping or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoo Farm To vs. Hyundai Home Shopping
Performance |
| Timeline |
| Dongwoo Farm To |
| Hyundai Home Shopping |
Dongwoo Farm and Hyundai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and Hyundai Home
The main advantage of trading using opposite Dongwoo Farm and Hyundai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm 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.| Dongwoo Farm vs. Orbitech Co | Dongwoo Farm vs. N2Tech Co | Dongwoo Farm vs. Nh Investment And | Dongwoo Farm vs. Korea Investment Holdings |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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