Correlation Between Hyosung Advanced and GS Retail
Can any of the company-specific risk be diversified away by investing in both Hyosung Advanced and GS Retail 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 Advanced and GS Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyosung Advanced Materials and GS Retail Co, you can compare the effects of market volatilities on Hyosung Advanced and GS Retail 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 Advanced with a short position of GS Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Advanced and GS Retail.
Diversification Opportunities for Hyosung Advanced and GS Retail
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hyosung and 007070 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Advanced Materials and GS Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Retail and Hyosung Advanced 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 Advanced Materials are associated (or correlated) with GS Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Retail has no effect on the direction of Hyosung Advanced i.e., Hyosung Advanced and GS Retail go up and down completely randomly.
Pair Corralation between Hyosung Advanced and GS Retail
Assuming the 90 days trading horizon Hyosung Advanced Materials is expected to under-perform the GS Retail. In addition to that, Hyosung Advanced is 1.32 times more volatile than GS Retail Co. It trades about -0.06 of its total potential returns per unit of risk. GS Retail Co is currently generating about -0.06 per unit of volatility. If you would invest 2,596,226 in GS Retail Co on October 29, 2024 and sell it today you would lose (1,064,226) from holding GS Retail Co or give up 40.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.14% |
| Values | Daily Returns |
Hyosung Advanced Materials vs. GS Retail Co
Performance |
| Timeline |
| Hyosung Advanced Mat |
| GS Retail |
Hyosung Advanced and GS Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Advanced and GS Retail
The main advantage of trading using opposite Hyosung Advanced and GS Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Advanced position performs unexpectedly, GS Retail 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 GS Retail will offset losses from the drop in GS Retail's long position.| Hyosung Advanced vs. Eagon Industrial Co | Hyosung Advanced vs. Nable Communications | Hyosung Advanced vs. Pyung Hwa Industrial | Hyosung Advanced vs. LEENO Industrial |
| GS Retail vs. KB Financial Group | GS Retail vs. Shinhan Financial Group | GS Retail vs. Hana Financial | GS Retail vs. Woori Financial Group |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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