Correlation Between Hyunwoo Industrial and Kukdong Oil
Can any of the company-specific risk be diversified away by investing in both Hyunwoo Industrial and Kukdong Oil 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 Kukdong Oil 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 Kukdong Oil Chemicals, you can compare the effects of market volatilities on Hyunwoo Industrial and Kukdong Oil 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 Kukdong Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyunwoo Industrial and Kukdong Oil.
Diversification Opportunities for Hyunwoo Industrial and Kukdong Oil
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyunwoo and Kukdong is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hyunwoo Industrial Co and Kukdong Oil Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdong Oil Chemicals 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 Kukdong Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdong Oil Chemicals has no effect on the direction of Hyunwoo Industrial i.e., Hyunwoo Industrial and Kukdong Oil go up and down completely randomly.
Pair Corralation between Hyunwoo Industrial and Kukdong Oil
Assuming the 90 days trading horizon Hyunwoo Industrial Co is expected to under-perform the Kukdong Oil. In addition to that, Hyunwoo Industrial is 3.07 times more volatile than Kukdong Oil Chemicals. It trades about -0.2 of its total potential returns per unit of risk. Kukdong Oil Chemicals is currently generating about -0.23 per unit of volatility. If you would invest 372,000 in Kukdong Oil Chemicals on September 1, 2024 and sell it today you would lose (14,000) from holding Kukdong Oil Chemicals or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyunwoo Industrial Co vs. Kukdong Oil Chemicals
Performance |
| Timeline |
| Hyunwoo Industrial |
| Kukdong Oil Chemicals |
Hyunwoo Industrial and Kukdong Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyunwoo Industrial and Kukdong Oil
The main advantage of trading using opposite Hyunwoo Industrial and Kukdong Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyunwoo Industrial position performs unexpectedly, Kukdong Oil 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 Kukdong Oil will offset losses from the drop in Kukdong Oil'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 |
| Kukdong Oil vs. AptaBio Therapeutics | Kukdong Oil vs. Daewoo SBI SPAC | Kukdong Oil vs. Dream Security co | Kukdong Oil vs. Microfriend |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |