Correlation Between Derkwoo Electronics and Hyundai Home
Can any of the company-specific risk be diversified away by investing in both Derkwoo Electronics and Hyundai Home 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 Derkwoo Electronics and Hyundai Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Derkwoo Electronics Co and Hyundai Home Shopping, you can compare the effects of market volatilities on Derkwoo Electronics and Hyundai Home 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 Derkwoo Electronics with a short position of Hyundai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Derkwoo Electronics and Hyundai Home.
Diversification Opportunities for Derkwoo Electronics and Hyundai Home
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Derkwoo and Hyundai is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Derkwoo Electronics Co and Hyundai Home Shopping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Home Shopping and Derkwoo Electronics 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 Derkwoo Electronics Co are associated (or correlated) with Hyundai Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Home Shopping has no effect on the direction of Derkwoo Electronics i.e., Derkwoo Electronics and Hyundai Home go up and down completely randomly.
Pair Corralation between Derkwoo Electronics and Hyundai Home
Assuming the 90 days trading horizon Derkwoo Electronics Co is expected to under-perform the Hyundai Home. In addition to that, Derkwoo Electronics is 2.21 times more volatile than Hyundai Home Shopping. It trades about -0.15 of its total potential returns per unit of risk. Hyundai Home Shopping is currently generating about 0.15 per unit of volatility. If you would invest 4,370,000 in Hyundai Home Shopping on September 25, 2024 and sell it today you would earn a total of 220,000 from holding Hyundai Home Shopping or generate 5.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Derkwoo Electronics Co vs. Hyundai Home Shopping
Performance |
| Timeline |
| Derkwoo Electronics |
| Hyundai Home Shopping |
Derkwoo Electronics and Hyundai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Derkwoo Electronics and Hyundai Home
The main advantage of trading using opposite Derkwoo Electronics and Hyundai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Derkwoo Electronics position performs unexpectedly, Hyundai Home 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 Home will offset losses from the drop in Hyundai Home's long position.| Derkwoo Electronics vs. Youngsin Metal Industrial | Derkwoo Electronics vs. Haesung Industrial Co | Derkwoo Electronics vs. Daiyang Metal Co | Derkwoo Electronics vs. ITM Semiconductor Co |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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