Correlation Between Hyundai Heavy and Jin Air
Can any of the company-specific risk be diversified away by investing in both Hyundai Heavy and Jin Air 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 Jin Air 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 Jin Air Co, you can compare the effects of market volatilities on Hyundai Heavy and Jin Air 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 Jin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Heavy and Jin Air.
Diversification Opportunities for Hyundai Heavy and Jin Air
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyundai and Jin is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Heavy Industries and Jin Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jin Air 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 Jin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jin Air has no effect on the direction of Hyundai Heavy i.e., Hyundai Heavy and Jin Air go up and down completely randomly.
Pair Corralation between Hyundai Heavy and Jin Air
Assuming the 90 days trading horizon Hyundai Heavy Industries is expected to generate 0.83 times more return on investment than Jin Air. However, Hyundai Heavy Industries is 1.2 times less risky than Jin Air. It trades about 0.06 of its potential returns per unit of risk. Jin Air Co is currently generating about -0.04 per unit of risk. If you would invest 5,575,147 in Hyundai Heavy Industries on November 9, 2024 and sell it today you would earn a total of 3,094,853 from holding Hyundai Heavy Industries or generate 55.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Heavy Industries vs. Jin Air Co
Performance |
| Timeline |
| Hyundai Heavy Industries |
| Jin Air |
Hyundai Heavy and Jin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Heavy and Jin Air
The main advantage of trading using opposite Hyundai Heavy and Jin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Heavy position performs unexpectedly, Jin Air 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 Jin Air will offset losses from the drop in Jin Air's long position.| Hyundai Heavy vs. Kbi Metal Co | Hyundai Heavy vs. Heungkuk Metaltech CoLtd | Hyundai Heavy vs. Daejung Chemicals Metals | Hyundai Heavy vs. Hyunwoo Industrial Co |
| Jin Air vs. SM Entertainment Co | Jin Air vs. SKONEC Entertainment Co | Jin Air vs. Jeju Beer Co | Jin Air vs. Worldex Industry Trading |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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