Correlation Between Hyundai Heavy and Han Kook
Can any of the company-specific risk be diversified away by investing in both Hyundai Heavy and Han Kook 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 Hyundai Heavy and Han Kook into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Heavy Industries and Han Kook Capital, you can compare the effects of market volatilities on Hyundai Heavy and Han Kook 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 Hyundai Heavy with a short position of Han Kook. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Heavy and Han Kook.
Diversification Opportunities for Hyundai Heavy and Han Kook
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and Han is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Heavy Industries and Han Kook Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Han Kook Capital and Hyundai 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 Hyundai Heavy Industries are associated (or correlated) with Han Kook. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Han Kook Capital has no effect on the direction of Hyundai Heavy i.e., Hyundai Heavy and Han Kook go up and down completely randomly.
Pair Corralation between Hyundai Heavy and Han Kook
Assuming the 90 days trading horizon Hyundai Heavy Industries is expected to generate 2.64 times more return on investment than Han Kook. However, Hyundai Heavy is 2.64 times more volatile than Han Kook Capital. It trades about 0.2 of its potential returns per unit of risk. Han Kook Capital is currently generating about 0.03 per unit of risk. If you would invest 19,880,000 in Hyundai Heavy Industries on September 14, 2024 and sell it today you would earn a total of 3,420,000 from holding Hyundai Heavy Industries or generate 17.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Heavy Industries vs. Han Kook Capital
Performance |
| Timeline |
| Hyundai Heavy Industries |
| Han Kook Capital |
Hyundai Heavy and Han Kook Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Heavy and Han Kook
The main advantage of trading using opposite Hyundai Heavy and Han Kook positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Heavy position performs unexpectedly, Han Kook 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 Han Kook will offset losses from the drop in Han Kook's long position.| Hyundai Heavy vs. Guyoung Technology Co | Hyundai Heavy vs. Neungyule Education | Hyundai Heavy vs. Digital Imaging Technology | Hyundai Heavy vs. Dong A Steel Technology |
| Han Kook vs. CG Hi Tech | Han Kook vs. Samlip General Foods | Han Kook vs. Sam Yang Foods | Han Kook vs. Korea Shipbuilding Offshore |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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