Correlation Between Pyung Hwa and Hyosung Advanced
Can any of the company-specific risk be diversified away by investing in both Pyung Hwa and Hyosung Advanced 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 Pyung Hwa and Hyosung Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pyung Hwa Industrial and Hyosung Advanced Materials, you can compare the effects of market volatilities on Pyung Hwa and Hyosung Advanced 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 Pyung Hwa with a short position of Hyosung Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pyung Hwa and Hyosung Advanced.
Diversification Opportunities for Pyung Hwa and Hyosung Advanced
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pyung and Hyosung is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Pyung Hwa Industrial and Hyosung Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Advanced Mat and Pyung Hwa 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 Pyung Hwa Industrial are associated (or correlated) with Hyosung Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Advanced Mat has no effect on the direction of Pyung Hwa i.e., Pyung Hwa and Hyosung Advanced go up and down completely randomly.
Pair Corralation between Pyung Hwa and Hyosung Advanced
Assuming the 90 days trading horizon Pyung Hwa Industrial is expected to generate 1.39 times more return on investment than Hyosung Advanced. However, Pyung Hwa is 1.39 times more volatile than Hyosung Advanced Materials. It trades about 0.04 of its potential returns per unit of risk. Hyosung Advanced Materials is currently generating about -0.15 per unit of risk. If you would invest 100,500 in Pyung Hwa Industrial on November 7, 2024 and sell it today you would earn a total of 9,500 from holding Pyung Hwa Industrial or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pyung Hwa Industrial vs. Hyosung Advanced Materials
Performance |
| Timeline |
| Pyung Hwa Industrial |
| Hyosung Advanced Mat |
Pyung Hwa and Hyosung Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pyung Hwa and Hyosung Advanced
The main advantage of trading using opposite Pyung Hwa and Hyosung Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pyung Hwa position performs unexpectedly, Hyosung Advanced 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 Hyosung Advanced will offset losses from the drop in Hyosung Advanced's long position.| Pyung Hwa vs. Finebesteel | Pyung Hwa vs. Homecast CoLtd | Pyung Hwa vs. Jb Financial | Pyung Hwa vs. BooKook Steel Co |
| Hyosung Advanced vs. LEENO Industrial | Hyosung Advanced vs. AeroSpace Technology of | Hyosung Advanced vs. SUN KWANG td | Hyosung Advanced vs. Pan Entertainment 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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