Correlation Between IQuest and Hyosung Advanced
Can any of the company-specific risk be diversified away by investing in both IQuest and Hyosung Advanced 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 IQuest and Hyosung Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQuest Co and Hyosung Advanced Materials, you can compare the effects of market volatilities on IQuest and Hyosung Advanced 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 IQuest with a short position of Hyosung Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQuest and Hyosung Advanced.
Diversification Opportunities for IQuest and Hyosung Advanced
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IQuest and Hyosung is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding IQuest Co and Hyosung Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Advanced Mat and IQuest 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 IQuest Co are associated (or correlated) with Hyosung Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Advanced Mat has no effect on the direction of IQuest i.e., IQuest and Hyosung Advanced go up and down completely randomly.
Pair Corralation between IQuest and Hyosung Advanced
Assuming the 90 days trading horizon IQuest Co is expected to generate 1.19 times more return on investment than Hyosung Advanced. However, IQuest is 1.19 times more volatile than Hyosung Advanced Materials. It trades about 0.0 of its potential returns per unit of risk. Hyosung Advanced Materials is currently generating about -0.12 per unit of risk. If you would invest 271,063 in IQuest Co on September 3, 2024 and sell it today you would lose (33,563) from holding IQuest Co or give up 12.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQuest Co vs. Hyosung Advanced Materials
Performance |
| Timeline |
| IQuest |
| Hyosung Advanced Mat |
IQuest and Hyosung Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQuest and Hyosung Advanced
The main advantage of trading using opposite IQuest and Hyosung Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQuest position performs unexpectedly, Hyosung Advanced 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 Hyosung Advanced will offset losses from the drop in Hyosung Advanced's long position.| IQuest vs. Semyung Electric Machinery | IQuest vs. GS Engineering Construction | IQuest vs. AurosTechnology | IQuest vs. Puloon Technology |
| Hyosung Advanced vs. Busan Industrial Co | Hyosung Advanced vs. UNISEM Co | Hyosung Advanced vs. RPBio Inc | Hyosung Advanced vs. Finebesteel |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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