Correlation Between Hyosung Heavy and Korea Computer
Can any of the company-specific risk be diversified away by investing in both Hyosung Heavy and Korea Computer 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 Heavy and Korea Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyosung Heavy Industries and Korea Computer, you can compare the effects of market volatilities on Hyosung Heavy and Korea Computer 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 Heavy with a short position of Korea Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Heavy and Korea Computer.
Diversification Opportunities for Hyosung Heavy and Korea Computer
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyosung and Korea is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Heavy Industries and Korea Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Computer and Hyosung 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 Hyosung Heavy Industries are associated (or correlated) with Korea Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Computer has no effect on the direction of Hyosung Heavy i.e., Hyosung Heavy and Korea Computer go up and down completely randomly.
Pair Corralation between Hyosung Heavy and Korea Computer
Assuming the 90 days trading horizon Hyosung Heavy Industries is expected to under-perform the Korea Computer. In addition to that, Hyosung Heavy is 1.01 times more volatile than Korea Computer. It trades about -0.15 of its total potential returns per unit of risk. Korea Computer is currently generating about 0.09 per unit of volatility. If you would invest 492,500 in Korea Computer on September 13, 2024 and sell it today you would earn a total of 29,500 from holding Korea Computer or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hyosung Heavy Industries vs. Korea Computer
Performance |
| Timeline |
| Hyosung Heavy Industries |
| Korea Computer |
Hyosung Heavy and Korea Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Heavy and Korea Computer
The main advantage of trading using opposite Hyosung Heavy and Korea Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Heavy position performs unexpectedly, Korea Computer 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 Korea Computer will offset losses from the drop in Korea Computer's long position.| Hyosung Heavy vs. LG Energy Solution | Hyosung Heavy vs. Doosan Heavy Ind | Hyosung Heavy vs. Aprogen KIC | Hyosung Heavy vs. Korea Refract |
| Korea Computer vs. Cube Entertainment | Korea Computer vs. Dreamus Company | Korea Computer vs. LG Energy Solution | Korea Computer vs. Dongwon System |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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