Correlation Between Hyundai Industrial and Kumho Industrial
Can any of the company-specific risk be diversified away by investing in both Hyundai Industrial and Kumho Industrial 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 Hyundai Industrial and Kumho Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Industrial Co and Kumho Industrial Co, you can compare the effects of market volatilities on Hyundai Industrial and Kumho Industrial 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 Hyundai Industrial with a short position of Kumho Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Industrial and Kumho Industrial.
Diversification Opportunities for Hyundai Industrial and Kumho Industrial
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hyundai and Kumho is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Industrial Co and Kumho Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Industrial and Hyundai Industrial 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 Hyundai Industrial Co are associated (or correlated) with Kumho Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Industrial has no effect on the direction of Hyundai Industrial i.e., Hyundai Industrial and Kumho Industrial go up and down completely randomly.
Pair Corralation between Hyundai Industrial and Kumho Industrial
Assuming the 90 days trading horizon Hyundai Industrial Co is expected to under-perform the Kumho Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Industrial Co is 2.35 times less risky than Kumho Industrial. The stock trades about -0.16 of its potential returns per unit of risk. The Kumho Industrial Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 283,000 in Kumho Industrial Co on September 2, 2024 and sell it today you would earn a total of 8,000 from holding Kumho Industrial Co or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Industrial Co vs. Kumho Industrial Co
Performance |
| Timeline |
| Hyundai Industrial |
| Kumho Industrial |
Hyundai Industrial and Kumho Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Industrial and Kumho Industrial
The main advantage of trading using opposite Hyundai Industrial and Kumho Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Industrial position performs unexpectedly, Kumho Industrial 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 Kumho Industrial will offset losses from the drop in Kumho Industrial's long position.| Hyundai Industrial vs. LG Display | Hyundai Industrial vs. Hyundai Motor Co | Hyundai Industrial vs. Hyundai Motor Co | Hyundai Industrial vs. Adaptive Plasma Technology |
| Kumho Industrial vs. AptaBio Therapeutics | Kumho Industrial vs. Daewoo SBI SPAC | Kumho Industrial vs. Dream Security co | Kumho Industrial 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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