Correlation Between IM CoLtd and Hyundai BNG

Can any of the company-specific risk be diversified away by investing in both IM CoLtd and Hyundai BNG 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 IM CoLtd and Hyundai BNG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IM CoLtd and Hyundai BNG Steel, you can compare the effects of market volatilities on IM CoLtd and Hyundai BNG 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 IM CoLtd with a short position of Hyundai BNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of IM CoLtd and Hyundai BNG.

Diversification Opportunities for IM CoLtd and Hyundai BNG

-0.73

Correlation Coefficient

IM CoLtd  Hyundai BNG

Pay attention - limited upside

The 3 months correlation between 101390 and Hyundai is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding IM CoLtd and Hyundai BNG Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai BNG Steel and IM CoLtd 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 IM CoLtd are associated (or correlated) with Hyundai BNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai BNG Steel has no effect on the direction of IM CoLtd i.e., IM CoLtd and Hyundai BNG go up and down completely randomly.

Pair Corralation between IM CoLtd and Hyundai BNG

Assuming the 90 days trading horizon IM CoLtd is expected to under-perform the Hyundai BNG. In addition to that, IM CoLtd is 1.88 times more volatile than Hyundai BNG Steel. It trades about -0.15 of its total potential returns per unit of risk. Hyundai BNG Steel is currently generating about -0.06 per unit of volatility. If you would invest  2,030,000  in Hyundai BNG Steel on December 5, 2024 and sell it today you would lose (756,000) from holding Hyundai BNG Steel or give up 37.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.54%
Values	Daily Returns

IM CoLtd  vs.  Hyundai BNG Steel

IM CoLtd

Risk-Adjusted Performance

Very Weak

Over the last 90 days IM CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hyundai BNG Steel

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hyundai BNG Steel are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hyundai BNG sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IM CoLtd and Hyundai BNG

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

The idea behind IM CoLtd and Hyundai BNG Steel 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.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.