Correlation Between PI Advanced and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both PI Advanced 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 PI Advanced and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PI Advanced Materials and Hyundai Engineering Plastics, you can compare the effects of market volatilities on PI Advanced 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 PI Advanced with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of PI Advanced and Hyundai Engineering.
Diversification Opportunities for PI Advanced and Hyundai Engineering
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between 178920 and Hyundai is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PI Advanced Materials and Hyundai Engineering Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and PI Advanced 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 PI Advanced Materials 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 PI Advanced i.e., PI Advanced and Hyundai Engineering go up and down completely randomly.
Pair Corralation between PI Advanced and Hyundai Engineering
Assuming the 90 days trading horizon PI Advanced Materials is expected to under-perform the Hyundai Engineering. In addition to that, PI Advanced is 1.85 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 -0.01 per unit of volatility. If you would invest 421,692 in Hyundai Engineering Plastics on November 27, 2024 and sell it today you would lose (69,692) from holding Hyundai Engineering Plastics or give up 16.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PI Advanced Materials vs. Hyundai Engineering Plastics
Performance |
| Timeline |
| PI Advanced Materials |
| Hyundai Engineering |
PI Advanced and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PI Advanced and Hyundai Engineering
The main advantage of trading using opposite PI Advanced and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PI Advanced 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.| PI Advanced vs. Korean Drug Co | PI Advanced vs. Hanjin Transportation Co | PI Advanced vs. LEENO Industrial | PI Advanced vs. Cube Entertainment |
| Hyundai Engineering vs. Formetal Co | Hyundai Engineering vs. Homecast CoLtd | Hyundai Engineering vs. Eagon Industrial Co | Hyundai Engineering vs. Haesung 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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