Correlation Between Hyosung Chemical and Chunbo
Can any of the company-specific risk be diversified away by investing in both Hyosung Chemical and Chunbo 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 Hyosung Chemical and Chunbo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyosung Chemical Corp and Chunbo Co, you can compare the effects of market volatilities on Hyosung Chemical and Chunbo 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 Hyosung Chemical with a short position of Chunbo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Chemical and Chunbo.
Diversification Opportunities for Hyosung Chemical and Chunbo
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hyosung and Chunbo is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Chemical Corp and Chunbo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chunbo and Hyosung Chemical 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 Hyosung Chemical Corp are associated (or correlated) with Chunbo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chunbo has no effect on the direction of Hyosung Chemical i.e., Hyosung Chemical and Chunbo go up and down completely randomly.
Pair Corralation between Hyosung Chemical and Chunbo
Assuming the 90 days trading horizon Hyosung Chemical Corp is expected to under-perform the Chunbo. But the stock apears to be less risky and, when comparing its historical volatility, Hyosung Chemical Corp is 1.13 times less risky than Chunbo. The stock trades about -0.12 of its potential returns per unit of risk. The Chunbo Co is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 8,320,000 in Chunbo Co on August 28, 2024 and sell it today you would lose (4,095,000) from holding Chunbo Co or give up 49.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyosung Chemical Corp vs. Chunbo Co
Performance |
| Timeline |
| Hyosung Chemical Corp |
| Chunbo |
Hyosung Chemical and Chunbo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Chemical and Chunbo
The main advantage of trading using opposite Hyosung Chemical and Chunbo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Chemical position performs unexpectedly, Chunbo 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 Chunbo will offset losses from the drop in Chunbo's long position.| Hyosung Chemical vs. Nh Investment And | Hyosung Chemical vs. Seoyon Topmetal Co | Hyosung Chemical vs. Sangsangin Investment Securities | Hyosung Chemical vs. MetaLabs Co |
| Chunbo vs. Visang Education | Chunbo vs. Infinitt Healthcare Co | Chunbo vs. Chorokbaem Healthcare Co | Chunbo vs. TS Investment Corp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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