Correlation Between Hyunwoo Industrial and Kumho Petro
Can any of the company-specific risk be diversified away by investing in both Hyunwoo Industrial and Kumho Petro 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 Kumho Petro 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 Kumho Petro Chemical, you can compare the effects of market volatilities on Hyunwoo Industrial and Kumho Petro 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 Kumho Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyunwoo Industrial and Kumho Petro.
Diversification Opportunities for Hyunwoo Industrial and Kumho Petro
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hyunwoo and Kumho is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hyunwoo Industrial Co and Kumho Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Petro Chemical 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 Kumho Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Petro Chemical has no effect on the direction of Hyunwoo Industrial i.e., Hyunwoo Industrial and Kumho Petro go up and down completely randomly.
Pair Corralation between Hyunwoo Industrial and Kumho Petro
Assuming the 90 days trading horizon Hyunwoo Industrial Co is expected to under-perform the Kumho Petro. In addition to that, Hyunwoo Industrial is 1.45 times more volatile than Kumho Petro Chemical. It trades about -0.05 of its total potential returns per unit of risk. Kumho Petro Chemical is currently generating about -0.03 per unit of volatility. If you would invest 6,872,222 in Kumho Petro Chemical on October 29, 2024 and sell it today you would lose (1,772,222) from holding Kumho Petro Chemical or give up 25.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyunwoo Industrial Co vs. Kumho Petro Chemical
Performance |
| Timeline |
| Hyunwoo Industrial |
| Kumho Petro Chemical |
Hyunwoo Industrial and Kumho Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyunwoo Industrial and Kumho Petro
The main advantage of trading using opposite Hyunwoo Industrial and Kumho Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyunwoo Industrial position performs unexpectedly, Kumho Petro 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 Kumho Petro will offset losses from the drop in Kumho Petro's long position.| Hyunwoo Industrial vs. DB Financial Investment | Hyunwoo Industrial vs. Woori Technology Investment | Hyunwoo Industrial vs. Samlip General Foods | Hyunwoo Industrial vs. Automobile Pc |
| Kumho Petro vs. Stic Investments | Kumho Petro vs. Samsung Publishing Co | Kumho Petro vs. LB Investment | Kumho Petro vs. Wireless Power Amplifier |
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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