Correlation Between Worldex Industry and Hyundai Home
Can any of the company-specific risk be diversified away by investing in both Worldex Industry and Hyundai Home 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 Worldex Industry and Hyundai Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldex Industry Trading and Hyundai Home Shopping, you can compare the effects of market volatilities on Worldex Industry and Hyundai Home 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 Worldex Industry with a short position of Hyundai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldex Industry and Hyundai Home.
Diversification Opportunities for Worldex Industry and Hyundai Home
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Worldex and Hyundai is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Worldex Industry Trading and Hyundai Home Shopping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Home Shopping and Worldex Industry 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 Worldex Industry Trading are associated (or correlated) with Hyundai Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Home Shopping has no effect on the direction of Worldex Industry i.e., Worldex Industry and Hyundai Home go up and down completely randomly.
Pair Corralation between Worldex Industry and Hyundai Home
Assuming the 90 days trading horizon Worldex Industry Trading is expected to generate 1.46 times more return on investment than Hyundai Home. However, Worldex Industry is 1.46 times more volatile than Hyundai Home Shopping. It trades about 0.0 of its potential returns per unit of risk. Hyundai Home Shopping is currently generating about 0.0 per unit of risk. If you would invest 2,027,662 in Worldex Industry Trading on October 27, 2024 and sell it today you would lose (267,662) from holding Worldex Industry Trading or give up 13.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worldex Industry Trading vs. Hyundai Home Shopping
Performance |
| Timeline |
| Worldex Industry Trading |
| Hyundai Home Shopping |
Worldex Industry and Hyundai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worldex Industry and Hyundai Home
The main advantage of trading using opposite Worldex Industry and Hyundai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldex Industry position performs unexpectedly, Hyundai Home 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 Home will offset losses from the drop in Hyundai Home's long position.| Worldex Industry vs. WONIK Materials CoLtd | Worldex Industry vs. SS TECH | Worldex Industry vs. TES Co | Worldex Industry vs. LEENO Industrial |
| Hyundai Home vs. KB Financial Group | Hyundai Home vs. Shinhan Financial Group | Hyundai Home vs. Hana Financial | Hyundai Home vs. Woori Financial Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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