Correlation Between Hyundai Heavy and AfreecaTV
Can any of the company-specific risk be diversified away by investing in both Hyundai Heavy and AfreecaTV 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 AfreecaTV 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 AfreecaTV Co, you can compare the effects of market volatilities on Hyundai Heavy and AfreecaTV 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 AfreecaTV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Heavy and AfreecaTV.
Diversification Opportunities for Hyundai Heavy and AfreecaTV
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hyundai and AfreecaTV is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Heavy Industries and AfreecaTV Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfreecaTV 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 AfreecaTV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfreecaTV has no effect on the direction of Hyundai Heavy i.e., Hyundai Heavy and AfreecaTV go up and down completely randomly.
Pair Corralation between Hyundai Heavy and AfreecaTV
Assuming the 90 days trading horizon Hyundai Heavy Industries is expected to generate 0.58 times more return on investment than AfreecaTV. However, Hyundai Heavy Industries is 1.73 times less risky than AfreecaTV. It trades about 0.07 of its potential returns per unit of risk. AfreecaTV Co is currently generating about 0.03 per unit of risk. If you would invest 6,036,387 in Hyundai Heavy Industries on August 25, 2024 and sell it today you would earn a total of 1,933,613 from holding Hyundai Heavy Industries or generate 32.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Heavy Industries vs. AfreecaTV Co
Performance |
| Timeline |
| Hyundai Heavy Industries |
| AfreecaTV |
Hyundai Heavy and AfreecaTV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Heavy and AfreecaTV
The main advantage of trading using opposite Hyundai Heavy and AfreecaTV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Heavy position performs unexpectedly, AfreecaTV 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 AfreecaTV will offset losses from the drop in AfreecaTV's long position.| Hyundai Heavy vs. ECSTELECOM Co | Hyundai Heavy vs. Kisan Telecom Co | Hyundai Heavy vs. BNK Financial Group | Hyundai Heavy vs. Dgb Financial |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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