Correlation Between Green Cross and Hyosung Chemical
Can any of the company-specific risk be diversified away by investing in both Green Cross and Hyosung Chemical 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 Green Cross and Hyosung Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cross Medical and Hyosung Chemical Corp, you can compare the effects of market volatilities on Green Cross and Hyosung Chemical 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 Green Cross with a short position of Hyosung Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cross and Hyosung Chemical.
Diversification Opportunities for Green Cross and Hyosung Chemical
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Green and Hyosung is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Green Cross Medical and Hyosung Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Chemical Corp and Green Cross 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 Green Cross Medical are associated (or correlated) with Hyosung Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Chemical Corp has no effect on the direction of Green Cross i.e., Green Cross and Hyosung Chemical go up and down completely randomly.
Pair Corralation between Green Cross and Hyosung Chemical
Assuming the 90 days trading horizon Green Cross Medical is expected to generate 1.0 times more return on investment than Hyosung Chemical. However, Green Cross Medical is 1.0 times less risky than Hyosung Chemical. It trades about -0.14 of its potential returns per unit of risk. Hyosung Chemical Corp is currently generating about -0.25 per unit of risk. If you would invest 467,000 in Green Cross Medical on August 28, 2024 and sell it today you would lose (91,000) from holding Green Cross Medical or give up 19.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cross Medical vs. Hyosung Chemical Corp
Performance |
| Timeline |
| Green Cross Medical |
| Hyosung Chemical Corp |
Green Cross and Hyosung Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cross and Hyosung Chemical
The main advantage of trading using opposite Green Cross and Hyosung Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cross position performs unexpectedly, Hyosung Chemical 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 Hyosung Chemical will offset losses from the drop in Hyosung Chemical's long position.| Green Cross vs. Medy Tox | Green Cross vs. Busan Industrial Co | Green Cross vs. Busan Ind | Green Cross vs. Mirae Asset Daewoo |
| Hyosung Chemical vs. System and Application | Hyosung Chemical vs. Korea Computer | Hyosung Chemical vs. Shinsegae Information Communication | Hyosung Chemical vs. Ssangyong Information Communication |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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