Correlation Between Hyunwoo Industrial and TSE
Can any of the company-specific risk be diversified away by investing in both Hyunwoo Industrial and TSE 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 TSE 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 TSE Co, you can compare the effects of market volatilities on Hyunwoo Industrial and TSE 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 TSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyunwoo Industrial and TSE.
Diversification Opportunities for Hyunwoo Industrial and TSE
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyunwoo and TSE is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hyunwoo Industrial Co and TSE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSE Co 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 TSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSE Co has no effect on the direction of Hyunwoo Industrial i.e., Hyunwoo Industrial and TSE go up and down completely randomly.
Pair Corralation between Hyunwoo Industrial and TSE
Assuming the 90 days trading horizon Hyunwoo Industrial is expected to generate 2.12 times less return on investment than TSE. But when comparing it to its historical volatility, Hyunwoo Industrial Co is 1.39 times less risky than TSE. It trades about 0.14 of its potential returns per unit of risk. TSE Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,090,000 in TSE Co on October 25, 2024 and sell it today you would earn a total of 460,000 from holding TSE Co or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Hyunwoo Industrial Co vs. TSE Co
Performance |
| Timeline |
| Hyunwoo Industrial |
| TSE Co |
Hyunwoo Industrial and TSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyunwoo Industrial and TSE
The main advantage of trading using opposite Hyunwoo Industrial and TSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyunwoo Industrial position performs unexpectedly, TSE 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 TSE will offset losses from the drop in TSE's long position.| Hyunwoo Industrial vs. SK Hynix | Hyunwoo Industrial vs. LX Semicon Co | Hyunwoo Industrial vs. Tokai Carbon Korea | Hyunwoo Industrial vs. People Technology |
| TSE vs. Hankuk Steel Wire | TSE vs. Nice Information Telecommunication | TSE vs. Inzi Display CoLtd | TSE vs. Daehan Steel |
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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