Correlation Between Hyundai Heavy and JUSUNG ENGINEERING

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

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

Diversification Opportunities for Hyundai Heavy and JUSUNG ENGINEERING

-0.16

Correlation Coefficient

Hyundai Heavy  JUSUNG ENGINEERING

Good diversification

The 3 months correlation between Hyundai and JUSUNG is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Heavy Industries and JUSUNG ENGINEERING Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JUSUNG ENGINEERING and Hyundai Heavy 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 Hyundai Heavy Industries are associated (or correlated) with JUSUNG ENGINEERING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JUSUNG ENGINEERING has no effect on the direction of Hyundai Heavy i.e., Hyundai Heavy and JUSUNG ENGINEERING go up and down completely randomly.

Pair Corralation between Hyundai Heavy and JUSUNG ENGINEERING

Assuming the 90 days trading horizon Hyundai Heavy is expected to generate 1.61 times less return on investment than JUSUNG ENGINEERING. But when comparing it to its historical volatility, Hyundai Heavy Industries is 1.84 times less risky than JUSUNG ENGINEERING. It trades about 0.08 of its potential returns per unit of risk. JUSUNG ENGINEERING Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,755,354  in JUSUNG ENGINEERING Co on October 7, 2024 and sell it today you would earn a total of  374,646  from holding JUSUNG ENGINEERING Co or generate 13.6% return on investment over 90 days.

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

Hyundai Heavy Industries  vs.  JUSUNG ENGINEERING Co

Hyundai Heavy Industries

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hyundai Heavy Industries are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hyundai Heavy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

JUSUNG ENGINEERING

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with Hyundai Heavy and JUSUNG ENGINEERING

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

The idea behind Hyundai Heavy Industries and JUSUNG ENGINEERING 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.