Correlation Between Hyundai Heavy and Air Busan
Can any of the company-specific risk be diversified away by investing in both Hyundai Heavy and Air Busan 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 Air Busan 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 Air Busan Co, you can compare the effects of market volatilities on Hyundai Heavy and Air Busan 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 Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Heavy and Air Busan.
Diversification Opportunities for Hyundai Heavy and Air Busan
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hyundai and Air is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Heavy Industries and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan 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 Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of Hyundai Heavy i.e., Hyundai Heavy and Air Busan go up and down completely randomly.
Pair Corralation between Hyundai Heavy and Air Busan
Assuming the 90 days trading horizon Hyundai Heavy Industries is expected to generate 0.82 times more return on investment than Air Busan. However, Hyundai Heavy Industries is 1.22 times less risky than Air Busan. It trades about 0.06 of its potential returns per unit of risk. Air Busan 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Heavy Industries vs. Air Busan Co
Performance |
| Timeline |
| Hyundai Heavy Industries |
| Air Busan |
Hyundai Heavy and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Heavy and Air Busan
The main advantage of trading using opposite Hyundai Heavy and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Heavy position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan'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 |
| Air Busan vs. Top Material Co | Air Busan vs. Wonil Special Steel | Air Busan vs. Han Kook Steel | Air Busan vs. Hana 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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