Correlation Between Hyunwoo Industrial and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both Hyunwoo Industrial and Jeju Beer 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 Jeju Beer 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 Jeju Beer Co, you can compare the effects of market volatilities on Hyunwoo Industrial and Jeju Beer 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 Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyunwoo Industrial and Jeju Beer.
Diversification Opportunities for Hyunwoo Industrial and Jeju Beer
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyunwoo and Jeju is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hyunwoo Industrial Co and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer 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 Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of Hyunwoo Industrial i.e., Hyunwoo Industrial and Jeju Beer go up and down completely randomly.
Pair Corralation between Hyunwoo Industrial and Jeju Beer
Assuming the 90 days trading horizon Hyunwoo Industrial Co is expected to generate 0.56 times more return on investment than Jeju Beer. However, Hyunwoo Industrial Co is 1.79 times less risky than Jeju Beer. It trades about 0.27 of its potential returns per unit of risk. Jeju Beer Co is currently generating about -0.13 per unit of risk. If you would invest 240,155 in Hyunwoo Industrial Co on October 12, 2024 and sell it today you would earn a total of 22,845 from holding Hyunwoo Industrial Co or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyunwoo Industrial Co vs. Jeju Beer Co
Performance |
| Timeline |
| Hyunwoo Industrial |
| Jeju Beer |
Hyunwoo Industrial and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyunwoo Industrial and Jeju Beer
The main advantage of trading using opposite Hyunwoo Industrial and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyunwoo Industrial position performs unexpectedly, Jeju Beer 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 Jeju Beer will offset losses from the drop in Jeju Beer's long position.| Hyunwoo Industrial vs. Kbi Metal Co | Hyunwoo Industrial vs. Daejung Chemicals Metals | Hyunwoo Industrial vs. Asiana Airlines | Hyunwoo Industrial vs. Cloud Air CoLtd |
| Jeju Beer vs. Kukdong Oil Chemicals | Jeju Beer vs. Daesung Industrial Co | Jeju Beer vs. Cheryong Industrial CoLtd | Jeju Beer vs. Hyunwoo Industrial 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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