Correlation Between Hyunwoo Industrial and DSC Investment
Can any of the company-specific risk be diversified away by investing in both Hyunwoo Industrial and DSC 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 DSC 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 DSC Investment, you can compare the effects of market volatilities on Hyunwoo Industrial and DSC 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 DSC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyunwoo Industrial and DSC Investment.
Diversification Opportunities for Hyunwoo Industrial and DSC Investment
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyunwoo and DSC is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hyunwoo Industrial Co and DSC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSC Investment 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 DSC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSC Investment has no effect on the direction of Hyunwoo Industrial i.e., Hyunwoo Industrial and DSC Investment go up and down completely randomly.
Pair Corralation between Hyunwoo Industrial and DSC Investment
Assuming the 90 days trading horizon Hyunwoo Industrial Co is expected to under-perform the DSC Investment. But the stock apears to be less risky and, when comparing its historical volatility, Hyunwoo Industrial Co is 1.12 times less risky than DSC Investment. The stock trades about -0.05 of its potential returns per unit of risk. The DSC Investment is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 457,000 in DSC Investment on September 1, 2024 and sell it today you would lose (168,000) from holding DSC Investment or give up 36.76% 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. DSC Investment
Performance |
| Timeline |
| Hyunwoo Industrial |
| DSC Investment |
Hyunwoo Industrial and DSC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyunwoo Industrial and DSC Investment
The main advantage of trading using opposite Hyunwoo Industrial and DSC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyunwoo Industrial position performs unexpectedly, DSC 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 DSC Investment will offset losses from the drop in DSC 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 |
| DSC Investment vs. Hanwha InvestmentSecurities Co | DSC Investment vs. Solution Advanced Technology | DSC Investment vs. Busan Industrial Co | DSC Investment vs. Busan Ind |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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