Correlation Between HJ ShipBuilding and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both HJ ShipBuilding and Hyundai Engineering 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 HJ ShipBuilding and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HJ ShipBuilding Construction and Hyundai Engineering Construction, you can compare the effects of market volatilities on HJ ShipBuilding and Hyundai Engineering 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 HJ ShipBuilding with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of HJ ShipBuilding and Hyundai Engineering.
Diversification Opportunities for HJ ShipBuilding and Hyundai Engineering
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 097230 and Hyundai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HJ ShipBuilding Construction and Hyundai Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and HJ ShipBuilding 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 HJ ShipBuilding Construction are associated (or correlated) with Hyundai Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Engineering has no effect on the direction of HJ ShipBuilding i.e., HJ ShipBuilding and Hyundai Engineering go up and down completely randomly.
Pair Corralation between HJ ShipBuilding and Hyundai Engineering
Assuming the 90 days trading horizon HJ ShipBuilding Construction is expected to generate 4.09 times more return on investment than Hyundai Engineering. However, HJ ShipBuilding is 4.09 times more volatile than Hyundai Engineering Construction. It trades about 0.47 of its potential returns per unit of risk. Hyundai Engineering Construction is currently generating about -0.12 per unit of risk. If you would invest 225,500 in HJ ShipBuilding Construction on August 29, 2024 and sell it today you would earn a total of 181,500 from holding HJ ShipBuilding Construction or generate 80.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
HJ ShipBuilding Construction vs. Hyundai Engineering Constructi
Performance |
| Timeline |
| HJ ShipBuilding Cons |
| Hyundai Engineering |
HJ ShipBuilding and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HJ ShipBuilding and Hyundai Engineering
The main advantage of trading using opposite HJ ShipBuilding and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HJ ShipBuilding position performs unexpectedly, Hyundai Engineering 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 Hyundai Engineering will offset losses from the drop in Hyundai Engineering's long position.| HJ ShipBuilding vs. Cloud Air CoLtd | HJ ShipBuilding vs. Nable Communications | HJ ShipBuilding vs. iNtRON Biotechnology | HJ ShipBuilding vs. Tway Air Co |
| Hyundai Engineering vs. Sungmoon Electronics Co | Hyundai Engineering vs. Samlip General Foods | Hyundai Engineering vs. Grand Korea Leisure | Hyundai Engineering vs. KyungIn Electronics 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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