Correlation Between Hyunwoo Industrial and Korea Investment
Can any of the company-specific risk be diversified away by investing in both Hyunwoo Industrial and Korea Investment 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 Korea Investment 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 Korea Investment Holdings, you can compare the effects of market volatilities on Hyunwoo Industrial and Korea Investment 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 Korea Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyunwoo Industrial and Korea Investment.
Diversification Opportunities for Hyunwoo Industrial and Korea Investment
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyunwoo and Korea is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hyunwoo Industrial Co and Korea Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Investment Holdings 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 Korea Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Investment Holdings has no effect on the direction of Hyunwoo Industrial i.e., Hyunwoo Industrial and Korea Investment go up and down completely randomly.
Pair Corralation between Hyunwoo Industrial and Korea Investment
Assuming the 90 days trading horizon Hyunwoo Industrial Co is expected to under-perform the Korea Investment. In addition to that, Hyunwoo Industrial is 1.7 times more volatile than Korea Investment Holdings. It trades about -0.05 of its total potential returns per unit of risk. Korea Investment Holdings is currently generating about 0.03 per unit of volatility. If you would invest 4,556,455 in Korea Investment Holdings on September 1, 2024 and sell it today you would earn a total of 853,545 from holding Korea Investment Holdings or generate 18.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyunwoo Industrial Co vs. Korea Investment Holdings
Performance |
| Timeline |
| Hyunwoo Industrial |
| Korea Investment Holdings |
Hyunwoo Industrial and Korea Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyunwoo Industrial and Korea Investment
The main advantage of trading using opposite Hyunwoo Industrial and Korea Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyunwoo Industrial position performs unexpectedly, Korea Investment 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 Korea Investment will offset losses from the drop in Korea Investment'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 |
| Korea Investment vs. GS Retail Co | Korea Investment vs. Handok Clean Tech | Korea Investment vs. Samsung Life Insurance | Korea Investment vs. Clean Science 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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