Correlation Between Nasmedia and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both Nasmedia and Hyundai Engineering 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 Nasmedia and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasmedia Co and Hyundai Engineering Construction, you can compare the effects of market volatilities on Nasmedia and Hyundai Engineering 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 Nasmedia with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasmedia and Hyundai Engineering.
Diversification Opportunities for Nasmedia and Hyundai Engineering
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nasmedia and Hyundai is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Nasmedia Co and Hyundai Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and Nasmedia 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 Nasmedia Co are associated (or correlated) with Hyundai Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Engineering has no effect on the direction of Nasmedia i.e., Nasmedia and Hyundai Engineering go up and down completely randomly.
Pair Corralation between Nasmedia and Hyundai Engineering
Assuming the 90 days trading horizon Nasmedia Co is expected to under-perform the Hyundai Engineering. In addition to that, Nasmedia is 1.14 times more volatile than Hyundai Engineering Construction. It trades about -0.04 of its total potential returns per unit of risk. Hyundai Engineering Construction is currently generating about -0.01 per unit of volatility. If you would invest 3,605,425 in Hyundai Engineering Construction on November 7, 2024 and sell it today you would lose (515,425) from holding Hyundai Engineering Construction or give up 14.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasmedia Co vs. Hyundai Engineering Constructi
Performance |
| Timeline |
| Nasmedia |
| Hyundai Engineering |
Nasmedia and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasmedia and Hyundai Engineering
The main advantage of trading using opposite Nasmedia and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasmedia position performs unexpectedly, Hyundai Engineering 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 Hyundai Engineering will offset losses from the drop in Hyundai Engineering's long position.| Nasmedia vs. Daehan Steel | Nasmedia vs. Daejung Chemicals Metals | Nasmedia vs. Seah Steel Corp | Nasmedia vs. BooKook Steel Co |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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