Correlation Between E Investment and Hyosung Chemical

Can any of the company-specific risk be diversified away by investing in both E Investment and Hyosung Chemical 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 E Investment and Hyosung Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between E Investment Development and Hyosung Chemical Corp, you can compare the effects of market volatilities on E Investment and Hyosung Chemical 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 E Investment with a short position of Hyosung Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Investment and Hyosung Chemical.

Diversification Opportunities for E Investment and Hyosung Chemical

0.0

Correlation Coefficient

E Investment  Hyosung Chemical

Pay attention - limited upside

The 3 months correlation between 093230 and Hyosung is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding E Investment Development and Hyosung Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Chemical Corp and E Investment 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 E Investment Development are associated (or correlated) with Hyosung Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Chemical Corp has no effect on the direction of E Investment i.e., E Investment and Hyosung Chemical go up and down completely randomly.

Pair Corralation between E Investment and Hyosung Chemical

If you would invest  139,200  in E Investment Development on December 25, 2024 and sell it today you would earn a total of  0.00  from holding E Investment Development or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

E Investment Development  vs.  Hyosung Chemical Corp

E Investment Development

Risk-Adjusted Performance

Very Weak

Over the last 90 days E Investment Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, E Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hyosung Chemical Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hyosung Chemical Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with E Investment and Hyosung Chemical

The main advantage of trading using opposite E Investment and Hyosung Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Investment position performs unexpectedly, Hyosung Chemical 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 Chemical will offset losses from the drop in Hyosung Chemical's long position.

The idea behind E Investment Development and Hyosung Chemical Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.