Correlation Between Hyundai Industrial and Kakao Games
Can any of the company-specific risk be diversified away by investing in both Hyundai Industrial and Kakao Games 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 Kakao Games 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 Kakao Games Corp, you can compare the effects of market volatilities on Hyundai Industrial and Kakao Games 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 Kakao Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Industrial and Kakao Games.
Diversification Opportunities for Hyundai Industrial and Kakao Games
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hyundai and Kakao is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Industrial Co and Kakao Games Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kakao Games Corp 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 Kakao Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kakao Games Corp has no effect on the direction of Hyundai Industrial i.e., Hyundai Industrial and Kakao Games go up and down completely randomly.
Pair Corralation between Hyundai Industrial and Kakao Games
Assuming the 90 days trading horizon Hyundai Industrial Co is expected to under-perform the Kakao Games. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Industrial Co is 1.86 times less risky than Kakao Games. The stock trades about -0.2 of its potential returns per unit of risk. The Kakao Games Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,770,000 in Kakao Games Corp on September 4, 2024 and sell it today you would earn a total of 127,000 from holding Kakao Games Corp or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hyundai Industrial Co vs. Kakao Games Corp
Performance |
| Timeline |
| Hyundai Industrial |
| Kakao Games Corp |
Hyundai Industrial and Kakao Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Industrial and Kakao Games
The main advantage of trading using opposite Hyundai Industrial and Kakao Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Industrial position performs unexpectedly, Kakao Games 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 Kakao Games will offset losses from the drop in Kakao Games' long position.| Hyundai Industrial vs. Songwon Industrial Co | Hyundai Industrial vs. Youngsin Metal Industrial | Hyundai Industrial vs. Wireless Power Amplifier | Hyundai Industrial vs. Lotte Data Communication |
| Kakao Games vs. Kukdong Oil Chemicals | Kakao Games vs. Display Tech Co | Kakao Games vs. Hyundai Industrial Co | Kakao Games vs. Korea Alcohol Industrial |
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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