Correlation Between Hyundai Engineering and InnoTherapy
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and InnoTherapy 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 InnoTherapy 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 InnoTherapy, you can compare the effects of market volatilities on Hyundai Engineering and InnoTherapy 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 InnoTherapy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and InnoTherapy.
Diversification Opportunities for Hyundai Engineering and InnoTherapy
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and InnoTherapy is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Plastics and InnoTherapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InnoTherapy 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 InnoTherapy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InnoTherapy has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and InnoTherapy go up and down completely randomly.
Pair Corralation between Hyundai Engineering and InnoTherapy
Assuming the 90 days trading horizon Hyundai Engineering Plastics is expected to under-perform the InnoTherapy. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Engineering Plastics is 4.51 times less risky than InnoTherapy. The stock trades about -0.14 of its potential returns per unit of risk. The InnoTherapy is currently generating about 0.55 of returns per unit of risk over similar time horizon. If you would invest 827,000 in InnoTherapy on November 7, 2024 and sell it today you would earn a total of 200,000 from holding InnoTherapy or generate 24.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Engineering Plastics vs. InnoTherapy
Performance |
| Timeline |
| Hyundai Engineering |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| InnoTherapy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Hyundai Engineering and InnoTherapy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and InnoTherapy
The main advantage of trading using opposite Hyundai Engineering and InnoTherapy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, InnoTherapy 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 InnoTherapy will offset losses from the drop in InnoTherapy'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 |
| InnoTherapy vs. Neungyule Education | InnoTherapy vs. Daehan Synthetic Fiber | InnoTherapy vs. Hotel Shilla Co | InnoTherapy vs. Hansol Chemical 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |