Correlation Between Hyundai Engineering and Formetal
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Formetal 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 Formetal 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 Formetal Co, you can compare the effects of market volatilities on Hyundai Engineering and Formetal 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 Formetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Formetal.
Diversification Opportunities for Hyundai Engineering and Formetal
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and Formetal is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Plastics and Formetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formetal 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 Formetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formetal has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Formetal go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Formetal
Assuming the 90 days trading horizon Hyundai Engineering Plastics is expected to under-perform the Formetal. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Engineering Plastics is 4.48 times less risky than Formetal. The stock trades about -0.08 of its potential returns per unit of risk. The Formetal Co is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 300,000 in Formetal Co on October 30, 2024 and sell it today you would earn a total of 80,500 from holding Formetal Co or generate 26.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Engineering Plastics vs. Formetal Co
Performance |
| Timeline |
| Hyundai Engineering |
| Formetal |
Hyundai Engineering and Formetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Formetal
The main advantage of trading using opposite Hyundai Engineering and Formetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Formetal 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 Formetal will offset losses from the drop in Formetal's long position.| Hyundai Engineering vs. Kakao Games Corp | Hyundai Engineering vs. SEOJEON ELECTRIC MACHINERY | Hyundai Engineering vs. Hanshin Construction Co | Hyundai Engineering vs. Dongwoo Farm To |
| Formetal vs. Shinhan Financial Group | Formetal vs. Golden Bridge Investment | Formetal vs. Jeju Bank | Formetal vs. DB Financial Investment |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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