Correlation Between Hyosung Chemical and Innometry
Can any of the company-specific risk be diversified away by investing in both Hyosung Chemical and Innometry 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 Innometry 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 Innometry Co, you can compare the effects of market volatilities on Hyosung Chemical and Innometry 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 Innometry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Chemical and Innometry.
Diversification Opportunities for Hyosung Chemical and Innometry
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hyosung and Innometry is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Chemical Corp and Innometry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innometry 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 Innometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innometry has no effect on the direction of Hyosung Chemical i.e., Hyosung Chemical and Innometry go up and down completely randomly.
Pair Corralation between Hyosung Chemical and Innometry
Assuming the 90 days trading horizon Hyosung Chemical Corp is expected to generate 2.96 times more return on investment than Innometry. However, Hyosung Chemical is 2.96 times more volatile than Innometry Co. It trades about 0.02 of its potential returns per unit of risk. Innometry Co is currently generating about -0.22 per unit of risk. If you would invest 3,965,000 in Hyosung Chemical Corp on September 5, 2024 and sell it today you would lose (65,000) from holding Hyosung Chemical Corp or give up 1.64% 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. Innometry Co
Performance |
| Timeline |
| Hyosung Chemical Corp |
| Innometry |
Hyosung Chemical and Innometry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Chemical and Innometry
The main advantage of trading using opposite Hyosung Chemical and Innometry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Chemical position performs unexpectedly, Innometry 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 Innometry will offset losses from the drop in Innometry's long position.| Hyosung Chemical vs. LG Chem | Hyosung Chemical vs. DukSan Neolux CoLtd | Hyosung Chemical vs. Sukgyung AT Co |
| Innometry vs. Daesung Hi Tech Co | Innometry vs. Hyosung Chemical Corp | Innometry vs. INFINITT Healthcare Co | Innometry vs. Osang Healthcare Co,Ltd |
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 Stocks Directory module to find actively traded stocks across global markets.
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