Correlation Between Hyosung Advanced and Xavis
Can any of the company-specific risk be diversified away by investing in both Hyosung Advanced and Xavis 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 Xavis 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 Xavis Co, you can compare the effects of market volatilities on Hyosung Advanced and Xavis 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 Xavis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Advanced and Xavis.
Diversification Opportunities for Hyosung Advanced and Xavis
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hyosung and Xavis is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Advanced Materials and Xavis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xavis 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 Xavis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xavis has no effect on the direction of Hyosung Advanced i.e., Hyosung Advanced and Xavis go up and down completely randomly.
Pair Corralation between Hyosung Advanced and Xavis
Assuming the 90 days trading horizon Hyosung Advanced Materials is expected to under-perform the Xavis. But the stock apears to be less risky and, when comparing its historical volatility, Hyosung Advanced Materials is 1.9 times less risky than Xavis. The stock trades about -0.05 of its potential returns per unit of risk. The Xavis Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 165,827 in Xavis Co on August 28, 2024 and sell it today you would lose (13,327) from holding Xavis Co or give up 8.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyosung Advanced Materials vs. Xavis Co
Performance |
| Timeline |
| Hyosung Advanced Mat |
| Xavis |
Hyosung Advanced and Xavis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyosung Advanced and Xavis
The main advantage of trading using opposite Hyosung Advanced and Xavis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Advanced position performs unexpectedly, Xavis 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 Xavis will offset losses from the drop in Xavis' long position.| Hyosung Advanced vs. Yura Tech Co | Hyosung Advanced vs. Visang Education | Hyosung Advanced vs. Amogreentech Co | Hyosung Advanced vs. CJ Seafood Corp |
| Xavis vs. Samsung Electronics Co | Xavis vs. Samsung Electronics Co | Xavis vs. LG Energy Solution | Xavis vs. SK Hynix |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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