Correlation Between Hyunwoo Industrial and Taeyang Metal
Can any of the company-specific risk be diversified away by investing in both Hyunwoo Industrial and Taeyang Metal 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 Hyunwoo Industrial and Taeyang Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyunwoo Industrial Co and Taeyang Metal Industrial, you can compare the effects of market volatilities on Hyunwoo Industrial and Taeyang Metal 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 Hyunwoo Industrial with a short position of Taeyang Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyunwoo Industrial and Taeyang Metal.
Diversification Opportunities for Hyunwoo Industrial and Taeyang Metal
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hyunwoo and Taeyang is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hyunwoo Industrial Co and Taeyang Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taeyang Metal Industrial and Hyunwoo Industrial 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 Hyunwoo Industrial Co are associated (or correlated) with Taeyang Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taeyang Metal Industrial has no effect on the direction of Hyunwoo Industrial i.e., Hyunwoo Industrial and Taeyang Metal go up and down completely randomly.
Pair Corralation between Hyunwoo Industrial and Taeyang Metal
Assuming the 90 days trading horizon Hyunwoo Industrial Co is expected to under-perform the Taeyang Metal. But the stock apears to be less risky and, when comparing its historical volatility, Hyunwoo Industrial Co is 2.55 times less risky than Taeyang Metal. The stock trades about -0.05 of its potential returns per unit of risk. The Taeyang Metal Industrial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 275,654 in Taeyang Metal Industrial on September 1, 2024 and sell it today you would earn a total of 140,846 from holding Taeyang Metal Industrial or generate 51.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyunwoo Industrial Co vs. Taeyang Metal Industrial
Performance |
| Timeline |
| Hyunwoo Industrial |
| Taeyang Metal Industrial |
Hyunwoo Industrial and Taeyang Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyunwoo Industrial and Taeyang Metal
The main advantage of trading using opposite Hyunwoo Industrial and Taeyang Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyunwoo Industrial position performs unexpectedly, Taeyang Metal 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 Taeyang Metal will offset losses from the drop in Taeyang Metal's long position.| Hyunwoo Industrial vs. Jeju Air Co | Hyunwoo Industrial vs. Hanmi Semiconductor Co | Hyunwoo Industrial vs. Jeju Semiconductor Corp | Hyunwoo Industrial vs. ABOV Semiconductor 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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