Correlation Between Hyundai Green and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Hyundai Green and Woori Technology 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 Woori Technology 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 Woori Technology Investment, you can compare the effects of market volatilities on Hyundai Green and Woori Technology 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 Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Green and Woori Technology.
Diversification Opportunities for Hyundai Green and Woori Technology
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Woori is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Green Food and Woori Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology Inv 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 Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology Inv has no effect on the direction of Hyundai Green i.e., Hyundai Green and Woori Technology go up and down completely randomly.
Pair Corralation between Hyundai Green and Woori Technology
Assuming the 90 days trading horizon Hyundai Green Food is expected to generate 0.34 times more return on investment than Woori Technology. However, Hyundai Green Food is 2.91 times less risky than Woori Technology. It trades about 0.44 of its potential returns per unit of risk. Woori Technology Investment is currently generating about -0.06 per unit of risk. If you would invest 1,164,000 in Hyundai Green Food on August 31, 2024 and sell it today you would earn a total of 211,000 from holding Hyundai Green Food or generate 18.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Green Food vs. Woori Technology Investment
Performance |
| Timeline |
| Hyundai Green Food |
| Woori Technology Inv |
Hyundai Green and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Green and Woori Technology
The main advantage of trading using opposite Hyundai Green and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Green position performs unexpectedly, Woori Technology 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 Woori Technology will offset losses from the drop in Woori Technology's long position.| Hyundai Green vs. Samsung Electronics Co | Hyundai Green vs. Samsung Electronics Co | Hyundai Green vs. LG Energy Solution | Hyundai Green vs. SK Hynix |
| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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