Correlation Between Hyundai Engineering and Hankukpackage
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Hankukpackage 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 Hankukpackage 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 Hankukpackage Co, you can compare the effects of market volatilities on Hyundai Engineering and Hankukpackage 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 Hankukpackage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Hankukpackage.
Diversification Opportunities for Hyundai Engineering and Hankukpackage
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Hankukpackage is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Plastics and Hankukpackage Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankukpackage 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 Hankukpackage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankukpackage has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Hankukpackage go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Hankukpackage
Assuming the 90 days trading horizon Hyundai Engineering Plastics is expected to generate 0.93 times more return on investment than Hankukpackage. However, Hyundai Engineering Plastics is 1.07 times less risky than Hankukpackage. It trades about -0.14 of its potential returns per unit of risk. Hankukpackage Co is currently generating about -0.61 per unit of risk. If you would invest 350,000 in Hyundai Engineering Plastics on November 7, 2024 and sell it today you would lose (4,500) from holding Hyundai Engineering Plastics or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Hyundai Engineering Plastics vs. Hankukpackage Co
Performance |
| Timeline |
| Hyundai Engineering |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hankukpackage |
Hyundai Engineering and Hankukpackage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Hankukpackage
The main advantage of trading using opposite Hyundai Engineering and Hankukpackage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Hankukpackage 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 Hankukpackage will offset losses from the drop in Hankukpackage's long position.| Hyundai Engineering vs. Kg Chemical | Hyundai Engineering vs. Neungyule Education | Hyundai Engineering vs. Dongbang Transport Logistics | Hyundai Engineering vs. UJU Electronics 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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