Correlation Between Tway Air and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both Tway Air 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 Tway Air and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tway Air Co and Hyundai Engineering Plastics, you can compare the effects of market volatilities on Tway Air 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 Tway Air with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tway Air and Hyundai Engineering.
Diversification Opportunities for Tway Air and Hyundai Engineering
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tway and Hyundai is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Tway Air Co and Hyundai Engineering Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and Tway Air 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 Tway Air 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 Tway Air i.e., Tway Air and Hyundai Engineering go up and down completely randomly.
Pair Corralation between Tway Air and Hyundai Engineering
Assuming the 90 days trading horizon Tway Air Co is expected to under-perform the Hyundai Engineering. In addition to that, Tway Air is 8.01 times more volatile than Hyundai Engineering Plastics. It trades about -0.02 of its total potential returns per unit of risk. Hyundai Engineering Plastics is currently generating about 0.05 per unit of volatility. If you would invest 351,500 in Hyundai Engineering Plastics on December 11, 2024 and sell it today you would earn a total of 4,000 from holding Hyundai Engineering Plastics or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tway Air Co vs. Hyundai Engineering Plastics
Performance |
| Timeline |
| Tway Air |
| Hyundai Engineering |
Tway Air and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tway Air and Hyundai Engineering
The main advantage of trading using opposite Tway Air and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tway Air 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.| Tway Air vs. Daishin Information Communications | Tway Air vs. Jeong Moon Information | Tway Air vs. Daou Data Corp | Tway Air vs. KT Submarine Telecom |
| Hyundai Engineering vs. Korea Information Communications | Hyundai Engineering vs. Kyung In Synthetic Corp | Hyundai Engineering vs. Kisan Telecom Co | Hyundai Engineering vs. Innowireless 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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