Correlation Between Hyosung Advanced and Asia Economy
Can any of the company-specific risk be diversified away by investing in both Hyosung Advanced and Asia Economy 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 Asia Economy 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 Asia Economy Daily, you can compare the effects of market volatilities on Hyosung Advanced and Asia Economy 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 Asia Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Advanced and Asia Economy.
Diversification Opportunities for Hyosung Advanced and Asia Economy
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyosung and Asia is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Advanced Materials and Asia Economy Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Economy Daily 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 Asia Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Economy Daily has no effect on the direction of Hyosung Advanced i.e., Hyosung Advanced and Asia Economy go up and down completely randomly.
Pair Corralation between Hyosung Advanced and Asia Economy
Assuming the 90 days trading horizon Hyosung Advanced Materials is expected to under-perform the Asia Economy. In addition to that, Hyosung Advanced is 1.18 times more volatile than Asia Economy Daily. It trades about -0.04 of its total potential returns per unit of risk. Asia Economy Daily is currently generating about 0.18 per unit of volatility. If you would invest 157,700 in Asia Economy Daily on October 25, 2024 and sell it today you would earn a total of 10,600 from holding Asia Economy Daily or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Hyosung Advanced Materials vs. Asia Economy Daily
Performance |
| Timeline |
| Hyosung Advanced Mat |
| Asia Economy Daily |
Hyosung Advanced and Asia Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Advanced and Asia Economy
The main advantage of trading using opposite Hyosung Advanced and Asia Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Advanced position performs unexpectedly, Asia Economy 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 Asia Economy will offset losses from the drop in Asia Economy's long position.| Hyosung Advanced vs. Digital Power Communications | Hyosung Advanced vs. Kukdong Oil Chemicals | Hyosung Advanced vs. Automobile Pc | Hyosung Advanced vs. SK Chemicals Co |
| Asia Economy vs. Next Entertainment World | Asia Economy vs. TJ media Co | Asia Economy vs. SM Entertainment Co | Asia Economy vs. Barunson Entertainment Arts |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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