Correlation Between Hyundai Engineering and DONGKUK TED
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and DONGKUK TED 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 DONGKUK TED 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 DONGKUK TED METAL, you can compare the effects of market volatilities on Hyundai Engineering and DONGKUK TED 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 DONGKUK TED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and DONGKUK TED.
Diversification Opportunities for Hyundai Engineering and DONGKUK TED
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hyundai and DONGKUK is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Plastics and DONGKUK TED METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK TED METAL 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 DONGKUK TED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK TED METAL has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and DONGKUK TED go up and down completely randomly.
Pair Corralation between Hyundai Engineering and DONGKUK TED
Assuming the 90 days trading horizon Hyundai Engineering Plastics is expected to generate 0.67 times more return on investment than DONGKUK TED. However, Hyundai Engineering Plastics is 1.49 times less risky than DONGKUK TED. It trades about 0.0 of its potential returns per unit of risk. DONGKUK TED METAL is currently generating about -0.09 per unit of risk. If you would invest 392,962 in Hyundai Engineering Plastics on October 11, 2024 and sell it today you would lose (41,962) from holding Hyundai Engineering Plastics or give up 10.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 79.63% |
| Values | Daily Returns |
Hyundai Engineering Plastics vs. DONGKUK TED METAL
Performance |
| Timeline |
| Hyundai Engineering |
| DONGKUK TED METAL |
Hyundai Engineering and DONGKUK TED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and DONGKUK TED
The main advantage of trading using opposite Hyundai Engineering and DONGKUK TED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, DONGKUK TED 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 DONGKUK TED will offset losses from the drop in DONGKUK TED's long position.| Hyundai Engineering vs. Camus Engineering Construction | Hyundai Engineering vs. GS Engineering Construction | Hyundai Engineering vs. Air Busan Co | Hyundai Engineering vs. Dongbang Ship Machinery |
| DONGKUK TED vs. Hyundai Engineering Plastics | DONGKUK TED vs. SEOJEON ELECTRIC MACHINERY | DONGKUK TED vs. Solus Advanced Materials | DONGKUK TED vs. Dongkuk Structures Construction |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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