Correlation Between Hyundai Green and National Plastic
Can any of the company-specific risk be diversified away by investing in both Hyundai Green and National Plastic 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 Green and National Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Green Food and National Plastic Co, you can compare the effects of market volatilities on Hyundai Green and National Plastic 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 Green with a short position of National Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Green and National Plastic.
Diversification Opportunities for Hyundai Green and National Plastic
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and National is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Green Food and National Plastic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Plastic and Hyundai Green 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 Green Food are associated (or correlated) with National Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Plastic has no effect on the direction of Hyundai Green i.e., Hyundai Green and National Plastic go up and down completely randomly.
Pair Corralation between Hyundai Green and National Plastic
Assuming the 90 days trading horizon Hyundai Green Food is expected to generate 2.23 times more return on investment than National Plastic. However, Hyundai Green is 2.23 times more volatile than National Plastic Co. It trades about 0.0 of its potential returns per unit of risk. National Plastic Co is currently generating about -0.51 per unit of risk. If you would invest 1,403,000 in Hyundai Green Food on November 3, 2024 and sell it today you would lose (3,000) from holding Hyundai Green Food or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Green Food vs. National Plastic Co
Performance |
| Timeline |
| Hyundai Green Food |
| National Plastic |
Hyundai Green and National Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Green and National Plastic
The main advantage of trading using opposite Hyundai Green and National Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Green position performs unexpectedly, National Plastic 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 National Plastic will offset losses from the drop in National Plastic's long position.| Hyundai Green vs. PLAYWITH | Hyundai Green vs. SV Investment | Hyundai Green vs. Neungyule Education | Hyundai Green vs. Alton Sports CoLtd |
| National Plastic vs. WONIK Materials CoLtd | National Plastic vs. Lotte Data Communication | National Plastic vs. Ssangyong Materials Corp | National Plastic vs. Lake Materials Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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