Correlation Between Hyundai Engineering and ABCO Electronics
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and ABCO Electronics 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 ABCO Electronics 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 ABCO Electronics Co, you can compare the effects of market volatilities on Hyundai Engineering and ABCO Electronics 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 ABCO Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and ABCO Electronics.
Diversification Opportunities for Hyundai Engineering and ABCO Electronics
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and ABCO is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Plastics and ABCO Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABCO Electronics 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 ABCO Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABCO Electronics has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and ABCO Electronics go up and down completely randomly.
Pair Corralation between Hyundai Engineering and ABCO Electronics
Assuming the 90 days trading horizon Hyundai Engineering Plastics is expected to generate 0.19 times more return on investment than ABCO Electronics. However, Hyundai Engineering Plastics is 5.34 times less risky than ABCO Electronics. It trades about 0.2 of its potential returns per unit of risk. ABCO Electronics Co is currently generating about -0.14 per unit of risk. If you would invest 345,500 in Hyundai Engineering Plastics on December 1, 2024 and sell it today you would earn a total of 11,000 from holding Hyundai Engineering Plastics or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Engineering Plastics vs. ABCO Electronics Co
Performance |
| Timeline |
| Hyundai Engineering |
| ABCO Electronics |
Hyundai Engineering and ABCO Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and ABCO Electronics
The main advantage of trading using opposite Hyundai Engineering and ABCO Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, ABCO Electronics 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 ABCO Electronics will offset losses from the drop in ABCO Electronics' long position.| Hyundai Engineering vs. National Plastic Co | Hyundai Engineering vs. Solus Advanced Materials | Hyundai Engineering vs. Lotte Energy Materials | Hyundai Engineering vs. DB Financial Investment |
| ABCO Electronics vs. PLAYWITH | ABCO Electronics vs. Aprogen Healthcare Games | ABCO Electronics vs. Asiana Airlines | ABCO Electronics vs. ITM Semiconductor 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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