Correlation Between KBSTAR 200TR and Hyundai Heavy
Can any of the company-specific risk be diversified away by investing in both KBSTAR 200TR and Hyundai Heavy 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 KBSTAR 200TR and Hyundai Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBSTAR 200TR and Hyundai Heavy Industries, you can compare the effects of market volatilities on KBSTAR 200TR and Hyundai Heavy 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 KBSTAR 200TR with a short position of Hyundai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBSTAR 200TR and Hyundai Heavy.
Diversification Opportunities for KBSTAR 200TR and Hyundai Heavy
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KBSTAR and Hyundai is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding KBSTAR 200TR and Hyundai Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Heavy Industries and KBSTAR 200TR 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 KBSTAR 200TR are associated (or correlated) with Hyundai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Heavy Industries has no effect on the direction of KBSTAR 200TR i.e., KBSTAR 200TR and Hyundai Heavy go up and down completely randomly.
Pair Corralation between KBSTAR 200TR and Hyundai Heavy
Assuming the 90 days trading horizon KBSTAR 200TR is expected to under-perform the Hyundai Heavy. But the etf apears to be less risky and, when comparing its historical volatility, KBSTAR 200TR is 1.32 times less risky than Hyundai Heavy. The etf trades about -0.03 of its potential returns per unit of risk. The Hyundai Heavy Industries is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6,692,351 in Hyundai Heavy Industries on August 28, 2024 and sell it today you would earn a total of 1,367,649 from holding Hyundai Heavy Industries or generate 20.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBSTAR 200TR vs. Hyundai Heavy Industries
Performance |
| Timeline |
| KBSTAR 200TR |
| Hyundai Heavy Industries |
KBSTAR 200TR and Hyundai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBSTAR 200TR and Hyundai Heavy
The main advantage of trading using opposite KBSTAR 200TR and Hyundai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBSTAR 200TR position performs unexpectedly, Hyundai Heavy 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 Hyundai Heavy will offset losses from the drop in Hyundai Heavy's long position.| KBSTAR 200TR vs. Busan Industrial Co | KBSTAR 200TR vs. Busan Ind | KBSTAR 200TR vs. Mirae Asset Daewoo | KBSTAR 200TR vs. Shinhan WTI Futures |
| Hyundai Heavy vs. Samsung Electronics Co | Hyundai Heavy vs. Samsung Electronics Co | Hyundai Heavy vs. Hyundai Motor Co | Hyundai Heavy vs. Hyundai Motor |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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