Correlation Between Hyundai Heavy and Koryo Credit
Can any of the company-specific risk be diversified away by investing in both Hyundai Heavy and Koryo Credit 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 Heavy and Koryo Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Heavy Industries and Koryo Credit Information, you can compare the effects of market volatilities on Hyundai Heavy and Koryo Credit 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 Heavy with a short position of Koryo Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Heavy and Koryo Credit.
Diversification Opportunities for Hyundai Heavy and Koryo Credit
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hyundai and Koryo is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Heavy Industries and Koryo Credit Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koryo Credit Information and Hyundai Heavy 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 Heavy Industries are associated (or correlated) with Koryo Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koryo Credit Information has no effect on the direction of Hyundai Heavy i.e., Hyundai Heavy and Koryo Credit go up and down completely randomly.
Pair Corralation between Hyundai Heavy and Koryo Credit
Assuming the 90 days trading horizon Hyundai Heavy Industries is expected to generate 3.34 times more return on investment than Koryo Credit. However, Hyundai Heavy is 3.34 times more volatile than Koryo Credit Information. It trades about 0.1 of its potential returns per unit of risk. Koryo Credit Information is currently generating about -0.16 per unit of risk. If you would invest 8,140,000 in Hyundai Heavy Industries on October 24, 2024 and sell it today you would earn a total of 350,000 from holding Hyundai Heavy Industries or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Heavy Industries vs. Koryo Credit Information
Performance |
| Timeline |
| Hyundai Heavy Industries |
| Koryo Credit Information |
Hyundai Heavy and Koryo Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Heavy and Koryo Credit
The main advantage of trading using opposite Hyundai Heavy and Koryo Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Heavy position performs unexpectedly, Koryo Credit 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 Koryo Credit will offset losses from the drop in Koryo Credit's long position.| Hyundai Heavy vs. BIT Computer Co | Hyundai Heavy vs. Woori Technology | Hyundai Heavy vs. Innowireless Co | Hyundai Heavy vs. Jinro Distillers Co |
| Koryo Credit vs. Phoenix Materials Co | Koryo Credit vs. LS Materials | Koryo Credit vs. Duksan Hi Metal | Koryo Credit vs. Top Material 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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