Correlation Between DSC Investment and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both DSC Investment 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 DSC Investment and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSC Investment and Hyundai Engineering Plastics, you can compare the effects of market volatilities on DSC Investment 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 DSC Investment with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSC Investment and Hyundai Engineering.
Diversification Opportunities for DSC Investment and Hyundai Engineering
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between DSC and Hyundai is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding DSC Investment and Hyundai Engineering Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and DSC Investment 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 DSC Investment 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 DSC Investment i.e., DSC Investment and Hyundai Engineering go up and down completely randomly.
Pair Corralation between DSC Investment and Hyundai Engineering
Assuming the 90 days trading horizon DSC Investment is expected to generate 1.53 times more return on investment than Hyundai Engineering. However, DSC Investment is 1.53 times more volatile than Hyundai Engineering Plastics. It trades about 0.01 of its potential returns per unit of risk. Hyundai Engineering Plastics is currently generating about 0.0 per unit of risk. If you would invest 325,500 in DSC Investment on September 21, 2024 and sell it today you would lose (27,000) from holding DSC Investment or give up 8.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DSC Investment vs. Hyundai Engineering Plastics
Performance |
| Timeline |
| DSC Investment |
| Hyundai Engineering |
DSC Investment and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSC Investment and Hyundai Engineering
The main advantage of trading using opposite DSC Investment and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSC Investment 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.| DSC Investment vs. Solution Advanced Technology | DSC Investment vs. Busan Industrial Co | DSC Investment vs. Busan Ind | DSC Investment vs. Sam Chun Dang |
| Hyundai Engineering vs. Daou Data Corp | Hyundai Engineering vs. Sangsangin Investment Securities | Hyundai Engineering vs. DSC Investment | Hyundai Engineering vs. NICE Information Service |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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