Correlation Between Hyundai Engineering and Next Bt
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Next Bt 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 Next Bt 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 Next Bt Co, you can compare the effects of market volatilities on Hyundai Engineering and Next Bt 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 Next Bt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Next Bt.
Diversification Opportunities for Hyundai Engineering and Next Bt
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hyundai and Next is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Plastics and Next Bt Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Bt 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 Next Bt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Bt has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Next Bt go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Next Bt
Assuming the 90 days trading horizon Hyundai Engineering Plastics is expected to generate 0.9 times more return on investment than Next Bt. However, Hyundai Engineering Plastics is 1.11 times less risky than Next Bt. It trades about -0.28 of its potential returns per unit of risk. Next Bt Co is currently generating about -0.36 per unit of risk. If you would invest 380,500 in Hyundai Engineering Plastics on September 12, 2024 and sell it today you would lose (49,000) from holding Hyundai Engineering Plastics or give up 12.88% 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. Next Bt Co
Performance |
| Timeline |
| Hyundai Engineering |
| Next Bt |
Hyundai Engineering and Next Bt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Next Bt
The main advantage of trading using opposite Hyundai Engineering and Next Bt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Next Bt 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 Next Bt will offset losses from the drop in Next Bt's long position.| Hyundai Engineering vs. Hankuk Steel Wire | Hyundai Engineering vs. Jeil Steel Mfg | Hyundai Engineering vs. Finebesteel | Hyundai Engineering vs. Dong A Steel Technology |
| Next Bt vs. Korea New Network | Next Bt vs. ICD Co | Next Bt vs. DYPNF CoLtd | Next Bt vs. Solution Advanced Technology |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |