Correlation Between TOPMATERIAL and Hyosung Advanced
Can any of the company-specific risk be diversified away by investing in both TOPMATERIAL and Hyosung 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 TOPMATERIAL and Hyosung Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOPMATERIAL LTD and Hyosung Advanced Materials, you can compare the effects of market volatilities on TOPMATERIAL and Hyosung 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 TOPMATERIAL with a short position of Hyosung Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOPMATERIAL and Hyosung Advanced.
Diversification Opportunities for TOPMATERIAL and Hyosung Advanced
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between TOPMATERIAL and Hyosung is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding TOPMATERIAL LTD and Hyosung Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Advanced Mat and TOPMATERIAL 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 TOPMATERIAL LTD are associated (or correlated) with Hyosung Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Advanced Mat has no effect on the direction of TOPMATERIAL i.e., TOPMATERIAL and Hyosung Advanced go up and down completely randomly.
Pair Corralation between TOPMATERIAL and Hyosung Advanced
Assuming the 90 days trading horizon TOPMATERIAL LTD is expected to under-perform the Hyosung Advanced. But the stock apears to be less risky and, when comparing its historical volatility, TOPMATERIAL LTD is 1.47 times less risky than Hyosung Advanced. The stock trades about -0.47 of its potential returns per unit of risk. The Hyosung Advanced Materials is currently generating about -0.27 of returns per unit of risk over similar time horizon. If you would invest 23,650,000 in Hyosung Advanced Materials on September 5, 2024 and sell it today you would lose (5,160,000) from holding Hyosung Advanced Materials or give up 21.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOPMATERIAL LTD vs. Hyosung Advanced Materials
Performance |
| Timeline |
| TOPMATERIAL LTD |
| Hyosung Advanced Mat |
TOPMATERIAL and Hyosung Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOPMATERIAL and Hyosung Advanced
The main advantage of trading using opposite TOPMATERIAL and Hyosung Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOPMATERIAL position performs unexpectedly, Hyosung 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 Hyosung Advanced will offset losses from the drop in Hyosung Advanced's long position.| TOPMATERIAL vs. Samsung Electronics Co | TOPMATERIAL vs. Samsung Electronics Co | TOPMATERIAL vs. LG Energy Solution | TOPMATERIAL vs. SK Hynix |
| Hyosung Advanced vs. Daol Investment Securities | Hyosung Advanced vs. TS Investment Corp | Hyosung Advanced vs. Seohee Construction Co | Hyosung Advanced vs. Nh Investment And |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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