Correlation Between Microfriend and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both Microfriend 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 Microfriend and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microfriend and Hyundai Engineering Plastics, you can compare the effects of market volatilities on Microfriend 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 Microfriend with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microfriend and Hyundai Engineering.
Diversification Opportunities for Microfriend and Hyundai Engineering
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microfriend and Hyundai is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Microfriend and Hyundai Engineering Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and Microfriend 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 Microfriend 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 Microfriend i.e., Microfriend and Hyundai Engineering go up and down completely randomly.
Pair Corralation between Microfriend and Hyundai Engineering
Assuming the 90 days trading horizon Microfriend is expected to under-perform the Hyundai Engineering. In addition to that, Microfriend is 2.36 times more volatile than Hyundai Engineering Plastics. It trades about -0.02 of its total potential returns per unit of risk. Hyundai Engineering Plastics is currently generating about -0.05 per unit of volatility. If you would invest 468,439 in Hyundai Engineering Plastics on August 25, 2024 and sell it today you would lose (106,439) from holding Hyundai Engineering Plastics or give up 22.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microfriend vs. Hyundai Engineering Plastics
Performance |
| Timeline |
| Microfriend |
| Hyundai Engineering |
Microfriend and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microfriend and Hyundai Engineering
The main advantage of trading using opposite Microfriend and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microfriend 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.| Microfriend vs. PJ Metal Co | Microfriend vs. Eagon Industrial Co | Microfriend vs. Lotte Data Communication | Microfriend vs. Mobile Appliance |
| Hyundai Engineering vs. AptaBio Therapeutics | Hyundai Engineering vs. Daewoo SBI SPAC | Hyundai Engineering vs. Dream Security co | Hyundai Engineering vs. Microfriend |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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