Correlation Between Hyundai Industrial and Industrial Bank
Can any of the company-specific risk be diversified away by investing in both Hyundai Industrial and Industrial Bank 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 Industrial Bank 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 Industrial Bank, you can compare the effects of market volatilities on Hyundai Industrial and Industrial Bank 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 Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Industrial and Industrial Bank.
Diversification Opportunities for Hyundai Industrial and Industrial Bank
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and Industrial is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Industrial Co and Industrial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank 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 Industrial Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Bank has no effect on the direction of Hyundai Industrial i.e., Hyundai Industrial and Industrial Bank go up and down completely randomly.
Pair Corralation between Hyundai Industrial and Industrial Bank
Assuming the 90 days trading horizon Hyundai Industrial is expected to generate 14.77 times less return on investment than Industrial Bank. In addition to that, Hyundai Industrial is 2.15 times more volatile than Industrial Bank. It trades about 0.0 of its total potential returns per unit of risk. Industrial Bank is currently generating about 0.07 per unit of volatility. If you would invest 983,876 in Industrial Bank on October 14, 2024 and sell it today you would earn a total of 481,124 from holding Industrial Bank or generate 48.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Industrial Co vs. Industrial Bank
Performance |
| Timeline |
| Hyundai Industrial |
| Industrial Bank |
Hyundai Industrial and Industrial Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Industrial and Industrial Bank
The main advantage of trading using opposite Hyundai Industrial and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Industrial position performs unexpectedly, Industrial Bank 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 Industrial Bank will offset losses from the drop in Industrial Bank's long position.| Hyundai Industrial vs. Samlip General Foods | Hyundai Industrial vs. Inzi Display CoLtd | Hyundai Industrial vs. Netmarble Games Corp | Hyundai Industrial vs. Sempio Foods Co |
| Industrial Bank vs. Namhwa Industrial Co | Industrial Bank vs. Hyundai Industrial Co | Industrial Bank vs. Lotte Non Life Insurance | Industrial Bank vs. Daesung Industrial Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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