Correlation Between Hyundai Engineering and Dawonsys CoLtd
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Dawonsys CoLtd 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 Dawonsys CoLtd 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 Dawonsys CoLtd, you can compare the effects of market volatilities on Hyundai Engineering and Dawonsys CoLtd 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 Dawonsys CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Dawonsys CoLtd.
Diversification Opportunities for Hyundai Engineering and Dawonsys CoLtd
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hyundai and Dawonsys is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Plastics and Dawonsys CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dawonsys CoLtd 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 Dawonsys CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dawonsys CoLtd has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Dawonsys CoLtd go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Dawonsys CoLtd
Assuming the 90 days trading horizon Hyundai Engineering Plastics is expected to under-perform the Dawonsys CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Engineering Plastics is 1.13 times less risky than Dawonsys CoLtd. The stock trades about -0.28 of its potential returns per unit of risk. The Dawonsys CoLtd is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 1,019,000 in Dawonsys CoLtd on September 12, 2024 and sell it today you would lose (113,000) from holding Dawonsys CoLtd or give up 11.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Engineering Plastics vs. Dawonsys CoLtd
Performance |
| Timeline |
| Hyundai Engineering |
| Dawonsys CoLtd |
Hyundai Engineering and Dawonsys CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Dawonsys CoLtd
The main advantage of trading using opposite Hyundai Engineering and Dawonsys CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Dawonsys CoLtd 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 Dawonsys CoLtd will offset losses from the drop in Dawonsys CoLtd'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 |
| Dawonsys CoLtd vs. Hyundai Engineering Plastics | Dawonsys CoLtd vs. PI Advanced Materials | Dawonsys CoLtd vs. Ssangyong Materials Corp | Dawonsys CoLtd vs. Shinsung Delta Tech |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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