Correlation Between Chorokbaem Healthcare and Hyundai Engineering

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

By analyzing existing cross correlation between Chorokbaem Healthcare Co and Hyundai Engineering Plastics, you can compare the effects of market volatilities on Chorokbaem Healthcare and Hyundai Engineering 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 Chorokbaem Healthcare with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chorokbaem Healthcare and Hyundai Engineering.

Diversification Opportunities for Chorokbaem Healthcare and Hyundai Engineering

0.09

Correlation Coefficient

Chorokbaem Healthcare  Hyundai Engineering

Significant diversification

The 3 months correlation between Chorokbaem and Hyundai is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Chorokbaem Healthcare Co and Hyundai Engineering Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and Chorokbaem Healthcare 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 Chorokbaem Healthcare Co are associated (or correlated) with Hyundai Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Engineering has no effect on the direction of Chorokbaem Healthcare i.e., Chorokbaem Healthcare and Hyundai Engineering go up and down completely randomly.

Pair Corralation between Chorokbaem Healthcare and Hyundai Engineering

Assuming the 90 days trading horizon Chorokbaem Healthcare Co is expected to generate 2.05 times more return on investment than Hyundai Engineering. However, Chorokbaem Healthcare is 2.05 times more volatile than Hyundai Engineering Plastics. It trades about 0.03 of its potential returns per unit of risk. Hyundai Engineering Plastics is currently generating about 0.0 per unit of risk. If you would invest  30,300  in Chorokbaem Healthcare Co on December 1, 2024 and sell it today you would earn a total of  1,100  from holding Chorokbaem Healthcare Co or generate 3.63% return on investment over 90 days.

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

Chorokbaem Healthcare Co  vs.  Hyundai Engineering Plastics

Chorokbaem Healthcare

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chorokbaem Healthcare Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Chorokbaem Healthcare may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Hyundai Engineering

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Chorokbaem Healthcare and Hyundai Engineering

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

The idea behind Chorokbaem Healthcare Co and Hyundai Engineering Plastics 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.