Correlation Between JC Chemical and Hyundai Industrial

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

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

Diversification Opportunities for JC Chemical and Hyundai Industrial

0.47

Correlation Coefficient

JC Chemical  Hyundai Industrial

Very weak diversification

The 3 months correlation between 137950 and Hyundai is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding JC Chemical Co and Hyundai Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Industrial and JC Chemical 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 JC Chemical Co 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 JC Chemical i.e., JC Chemical and Hyundai Industrial go up and down completely randomly.

Pair Corralation between JC Chemical and Hyundai Industrial

Assuming the 90 days trading horizon JC Chemical is expected to generate 110.47 times less return on investment than Hyundai Industrial. In addition to that, JC Chemical is 1.6 times more volatile than Hyundai Industrial Co. It trades about 0.0 of its total potential returns per unit of risk. Hyundai Industrial Co is currently generating about 0.15 per unit of volatility. If you would invest  493,000  in Hyundai Industrial Co on October 27, 2024 and sell it today you would earn a total of  16,000  from holding Hyundai Industrial Co or generate 3.25% return on investment over 90 days.

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

JC Chemical Co  vs.  Hyundai Industrial Co

JC Chemical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JC Chemical Co 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hyundai Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with JC Chemical and Hyundai Industrial

The main advantage of trading using opposite JC Chemical and Hyundai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JC Chemical 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.

The idea behind JC Chemical Co and Hyundai Industrial Co 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.