Correlation Between Hyundai Engineering and Korea Information
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Korea Information 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 Hyundai Engineering and Korea Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Engineering Plastics and Korea Information Communications, you can compare the effects of market volatilities on Hyundai Engineering and Korea Information 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 Hyundai Engineering with a short position of Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Korea Information.
Diversification Opportunities for Hyundai Engineering and Korea Information
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Korea is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Plastics and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information and Hyundai Engineering 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 Hyundai Engineering Plastics are associated (or correlated) with Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Korea Information go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Korea Information
Assuming the 90 days trading horizon Hyundai Engineering Plastics is expected to under-perform the Korea Information. In addition to that, Hyundai Engineering is 1.2 times more volatile than Korea Information Communications. It trades about -0.21 of its total potential returns per unit of risk. Korea Information Communications is currently generating about -0.05 per unit of volatility. If you would invest 850,000 in Korea Information Communications on August 25, 2024 and sell it today you would lose (32,000) from holding Korea Information Communications or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Engineering Plastics vs. Korea Information Communicatio
Performance |
| Timeline |
| Hyundai Engineering |
| Korea Information |
Hyundai Engineering and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Korea Information
The main advantage of trading using opposite Hyundai Engineering and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.| Hyundai Engineering vs. AptaBio Therapeutics | Hyundai Engineering vs. Daewoo SBI SPAC | Hyundai Engineering vs. Dream Security co | Hyundai Engineering vs. Microfriend |
| Korea Information vs. Korea Real Estate | Korea Information vs. Korea Ratings Co | Korea Information vs. IQuest Co | Korea Information vs. Wonbang Tech 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Stocks Directory Find actively traded stocks across global markets |