Correlation Between Hyundai Engineering and Ecoplastic
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Ecoplastic 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 Ecoplastic 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 Ecoplastic, you can compare the effects of market volatilities on Hyundai Engineering and Ecoplastic 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 Ecoplastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Ecoplastic.
Diversification Opportunities for Hyundai Engineering and Ecoplastic
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hyundai and Ecoplastic is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Plastics and Ecoplastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecoplastic 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 Ecoplastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecoplastic has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Ecoplastic go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Ecoplastic
Assuming the 90 days trading horizon Hyundai Engineering Plastics is expected to generate 0.77 times more return on investment than Ecoplastic. However, Hyundai Engineering Plastics is 1.3 times less risky than Ecoplastic. It trades about -0.04 of its potential returns per unit of risk. Ecoplastic is currently generating about -0.11 per unit of risk. If you would invest 455,000 in Hyundai Engineering Plastics on August 25, 2024 and sell it today you would lose (93,000) from holding Hyundai Engineering Plastics or give up 20.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Engineering Plastics vs. Ecoplastic
Performance |
| Timeline |
| Hyundai Engineering |
| Ecoplastic |
Hyundai Engineering and Ecoplastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Ecoplastic
The main advantage of trading using opposite Hyundai Engineering and Ecoplastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Ecoplastic 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 Ecoplastic will offset losses from the drop in Ecoplastic's long position.| Hyundai Engineering vs. AptaBio Therapeutics | Hyundai Engineering vs. Daewoo SBI SPAC | Hyundai Engineering vs. Dream Security co | Hyundai Engineering vs. Microfriend |
| Ecoplastic vs. Samwha Electronics Co | Ecoplastic vs. Samlip General Foods | Ecoplastic vs. DAEDUCK ELECTRONICS CoLtd | Ecoplastic vs. Cuckoo 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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