Correlation Between Hyundai Industrial and Prestige Biologics
Can any of the company-specific risk be diversified away by investing in both Hyundai Industrial and Prestige Biologics 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 Prestige Biologics 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 Prestige Biologics Co, you can compare the effects of market volatilities on Hyundai Industrial and Prestige Biologics 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 Prestige Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Industrial and Prestige Biologics.
Diversification Opportunities for Hyundai Industrial and Prestige Biologics
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hyundai and Prestige is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Industrial Co and Prestige Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prestige Biologics 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 Prestige Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prestige Biologics has no effect on the direction of Hyundai Industrial i.e., Hyundai Industrial and Prestige Biologics go up and down completely randomly.
Pair Corralation between Hyundai Industrial and Prestige Biologics
Assuming the 90 days trading horizon Hyundai Industrial Co is expected to under-perform the Prestige Biologics. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Industrial Co is 1.35 times less risky than Prestige Biologics. The stock trades about -0.04 of its potential returns per unit of risk. The Prestige Biologics Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 468,000 in Prestige Biologics Co on September 5, 2024 and sell it today you would earn a total of 81,000 from holding Prestige Biologics Co or generate 17.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Industrial Co vs. Prestige Biologics Co
Performance |
| Timeline |
| Hyundai Industrial |
| Prestige Biologics |
Hyundai Industrial and Prestige Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Industrial and Prestige Biologics
The main advantage of trading using opposite Hyundai Industrial and Prestige Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Industrial position performs unexpectedly, Prestige Biologics 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 Prestige Biologics will offset losses from the drop in Prestige Biologics' long position.| Hyundai Industrial vs. Korea Real Estate | Hyundai Industrial vs. Busan Industrial Co | Hyundai Industrial vs. UNISEM Co | Hyundai Industrial vs. RPBio Inc |
| Prestige Biologics vs. Myoung Shin Industrial | Prestige Biologics vs. Namhwa Industrial Co | Prestige Biologics vs. Daiyang Metal Co | Prestige Biologics vs. Lotte Non Life Insurance |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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