Correlation Between DONGKUK TED and Hyundai Industrial
Can any of the company-specific risk be diversified away by investing in both DONGKUK TED and Hyundai Industrial 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 DONGKUK TED and Hyundai Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DONGKUK TED METAL and Hyundai Industrial Co, you can compare the effects of market volatilities on DONGKUK TED and Hyundai Industrial 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 DONGKUK TED with a short position of Hyundai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of DONGKUK TED and Hyundai Industrial.
Diversification Opportunities for DONGKUK TED and Hyundai Industrial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DONGKUK and Hyundai is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding DONGKUK TED METAL and Hyundai Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Industrial and DONGKUK TED 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 DONGKUK TED METAL are associated (or correlated) with Hyundai Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Industrial has no effect on the direction of DONGKUK TED i.e., DONGKUK TED and Hyundai Industrial go up and down completely randomly.
Pair Corralation between DONGKUK TED and Hyundai Industrial
Assuming the 90 days trading horizon DONGKUK TED METAL is expected to generate 1.01 times more return on investment than Hyundai Industrial. However, DONGKUK TED is 1.01 times more volatile than Hyundai Industrial Co. It trades about 0.3 of its potential returns per unit of risk. Hyundai Industrial Co is currently generating about 0.17 per unit of risk. If you would invest 595,000 in DONGKUK TED METAL on October 29, 2024 and sell it today you would earn a total of 39,000 from holding DONGKUK TED METAL or generate 6.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DONGKUK TED METAL vs. Hyundai Industrial Co
Performance |
| Timeline |
| DONGKUK TED METAL |
| Hyundai Industrial |
DONGKUK TED and Hyundai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DONGKUK TED and Hyundai Industrial
The main advantage of trading using opposite DONGKUK TED and Hyundai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DONGKUK TED position performs unexpectedly, Hyundai Industrial 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 Industrial will offset losses from the drop in Hyundai Industrial's long position.| DONGKUK TED vs. ENERGYMACHINERY KOREA CoLtd | DONGKUK TED vs. Hanshin Construction Co | DONGKUK TED vs. Daewoo Engineering Construction | DONGKUK TED vs. Dongkuk Structures Construction |
| Hyundai Industrial vs. DONGKUK STEEL MILL | Hyundai Industrial vs. Insun Environment New | Hyundai Industrial vs. BooKook Steel Co | Hyundai Industrial vs. Wonil Special Steel |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |