Correlation Between Kolon Plastics and Hyundai Home
Can any of the company-specific risk be diversified away by investing in both Kolon Plastics 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 Kolon Plastics and Hyundai Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Plastics and Hyundai Home Shopping, you can compare the effects of market volatilities on Kolon Plastics 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 Kolon Plastics with a short position of Hyundai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Plastics and Hyundai Home.
Diversification Opportunities for Kolon Plastics and Hyundai Home
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kolon and Hyundai is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Plastics 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 Kolon Plastics 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 Kolon Plastics 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 Kolon Plastics i.e., Kolon Plastics and Hyundai Home go up and down completely randomly.
Pair Corralation between Kolon Plastics and Hyundai Home
Assuming the 90 days trading horizon Kolon Plastics is expected to generate 1.08 times more return on investment than Hyundai Home. However, Kolon Plastics is 1.08 times more volatile than Hyundai Home Shopping. It trades about 0.09 of its potential returns per unit of risk. Hyundai Home Shopping is currently generating about -0.03 per unit of risk. If you would invest 531,000 in Kolon Plastics on October 12, 2024 and sell it today you would earn a total of 15,000 from holding Kolon Plastics or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kolon Plastics vs. Hyundai Home Shopping
Performance |
| Timeline |
| Kolon Plastics |
| Hyundai Home Shopping |
Kolon Plastics and Hyundai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolon Plastics and Hyundai Home
The main advantage of trading using opposite Kolon Plastics and Hyundai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Plastics 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.| Kolon Plastics vs. Hyundai Home Shopping | Kolon Plastics vs. Daejung Chemicals Metals | Kolon Plastics vs. Organic Special Pet | Kolon Plastics vs. SK Chemicals Co |
| Hyundai Home vs. Tway Air Co | Hyundai Home vs. Lotte Non Life Insurance | Hyundai Home vs. Heungkuk Metaltech CoLtd | Hyundai Home vs. Cloud Air CoLtd |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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