Correlation Between Hyundai Heavy and Korea New
Can any of the company-specific risk be diversified away by investing in both Hyundai Heavy and Korea New 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 Korea New 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 Korea New Network, you can compare the effects of market volatilities on Hyundai Heavy and Korea New 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 Korea New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Heavy and Korea New.
Diversification Opportunities for Hyundai Heavy and Korea New
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and Korea is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Heavy Industries and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network 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 Korea New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of Hyundai Heavy i.e., Hyundai Heavy and Korea New go up and down completely randomly.
Pair Corralation between Hyundai Heavy and Korea New
Assuming the 90 days trading horizon Hyundai Heavy Industries is expected to generate 0.97 times more return on investment than Korea New. However, Hyundai Heavy Industries is 1.03 times less risky than Korea New. It trades about -0.02 of its potential returns per unit of risk. Korea New Network is currently generating about -0.04 per unit of risk. If you would invest 8,100,000 in Hyundai Heavy Industries on August 29, 2024 and sell it today you would lose (90,000) from holding Hyundai Heavy Industries or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Heavy Industries vs. Korea New Network
Performance |
| Timeline |
| Hyundai Heavy Industries |
| Korea New Network |
Hyundai Heavy and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Heavy and Korea New
The main advantage of trading using opposite Hyundai Heavy and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Heavy position performs unexpectedly, Korea New 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 Korea New will offset losses from the drop in Korea New's long position.| Hyundai Heavy vs. Infinitt Healthcare Co | Hyundai Heavy vs. Koryo Credit Information | Hyundai Heavy vs. SCI Information Service | Hyundai Heavy vs. CU Medical Systems |
| Korea New vs. Hyundai Engineering Plastics | Korea New vs. Dongwon Metal Co | Korea New vs. Taeyang Metal Industrial | Korea New vs. LS Materials |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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