Correlation Between Hyundai Heavy and Dreamus
Can any of the company-specific risk be diversified away by investing in both Hyundai Heavy and Dreamus 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 Dreamus 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 Dreamus Company, you can compare the effects of market volatilities on Hyundai Heavy and Dreamus 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 Dreamus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Heavy and Dreamus.
Diversification Opportunities for Hyundai Heavy and Dreamus
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Dreamus is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Heavy Industries and Dreamus Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreamus Company 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 Dreamus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreamus Company has no effect on the direction of Hyundai Heavy i.e., Hyundai Heavy and Dreamus go up and down completely randomly.
Pair Corralation between Hyundai Heavy and Dreamus
Assuming the 90 days trading horizon Hyundai Heavy Industries is expected to generate 0.85 times more return on investment than Dreamus. However, Hyundai Heavy Industries is 1.18 times less risky than Dreamus. It trades about 0.09 of its potential returns per unit of risk. Dreamus Company is currently generating about -0.02 per unit of risk. If you would invest 9,740,000 in Hyundai Heavy Industries on November 27, 2024 and sell it today you would earn a total of 20,110,000 from holding Hyundai Heavy Industries or generate 206.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Heavy Industries vs. Dreamus Company
Performance |
| Timeline |
| Hyundai Heavy Industries |
| Dreamus Company |
Hyundai Heavy and Dreamus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Heavy and Dreamus
The main advantage of trading using opposite Hyundai Heavy and Dreamus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Heavy position performs unexpectedly, Dreamus 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 Dreamus will offset losses from the drop in Dreamus' long position.| Hyundai Heavy vs. InfoBank | Hyundai Heavy vs. EBEST Investment Securities | Hyundai Heavy vs. Koryo Credit Information | Hyundai Heavy vs. Hana Financial |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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