Correlation Between Hyosung Advanced and PI Advanced
Can any of the company-specific risk be diversified away by investing in both Hyosung Advanced and PI Advanced 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 PI Advanced 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 PI Advanced Materials, you can compare the effects of market volatilities on Hyosung Advanced and PI Advanced 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 PI Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Advanced and PI Advanced.
Diversification Opportunities for Hyosung Advanced and PI Advanced
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyosung and 178920 is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Advanced Materials and PI Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PI Advanced Materials 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 PI Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PI Advanced Materials has no effect on the direction of Hyosung Advanced i.e., Hyosung Advanced and PI Advanced go up and down completely randomly.
Pair Corralation between Hyosung Advanced and PI Advanced
Assuming the 90 days trading horizon Hyosung Advanced Materials is expected to under-perform the PI Advanced. But the stock apears to be less risky and, when comparing its historical volatility, Hyosung Advanced Materials is 1.38 times less risky than PI Advanced. The stock trades about -0.1 of its potential returns per unit of risk. The PI Advanced Materials is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,450,659 in PI Advanced Materials on August 25, 2024 and sell it today you would lose (712,659) from holding PI Advanced Materials or give up 29.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyosung Advanced Materials vs. PI Advanced Materials
Performance |
| Timeline |
| Hyosung Advanced Mat |
| PI Advanced Materials |
Hyosung Advanced and PI Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Advanced and PI Advanced
The main advantage of trading using opposite Hyosung Advanced and PI Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Advanced position performs unexpectedly, PI Advanced 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 PI Advanced will offset losses from the drop in PI Advanced's long position.| Hyosung Advanced vs. Busan Industrial Co | Hyosung Advanced vs. Busan Ind | Hyosung Advanced vs. Mirae Asset Daewoo | Hyosung Advanced vs. UNISEM Co |
| PI Advanced vs. Grand Korea Leisure | PI Advanced vs. Daehan Synthetic Fiber | PI Advanced vs. PlayD Co | PI Advanced vs. Display Tech Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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