Correlation Between Hyosung Advanced and Chinyang Hold
Can any of the company-specific risk be diversified away by investing in both Hyosung Advanced and Chinyang Hold 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 Hyosung Advanced and Chinyang Hold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyosung Advanced Materials and Chinyang Hold, you can compare the effects of market volatilities on Hyosung Advanced and Chinyang Hold 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 Hyosung Advanced with a short position of Chinyang Hold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Advanced and Chinyang Hold.
Diversification Opportunities for Hyosung Advanced and Chinyang Hold
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hyosung and Chinyang is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Advanced Materials and Chinyang Hold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinyang Hold and Hyosung Advanced 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 Hyosung Advanced Materials are associated (or correlated) with Chinyang Hold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinyang Hold has no effect on the direction of Hyosung Advanced i.e., Hyosung Advanced and Chinyang Hold go up and down completely randomly.
Pair Corralation between Hyosung Advanced and Chinyang Hold
Assuming the 90 days trading horizon Hyosung Advanced Materials is expected to under-perform the Chinyang Hold. In addition to that, Hyosung Advanced is 2.94 times more volatile than Chinyang Hold. It trades about -0.04 of its total potential returns per unit of risk. Chinyang Hold is currently generating about 0.04 per unit of volatility. If you would invest 272,723 in Chinyang Hold on September 24, 2024 and sell it today you would earn a total of 46,277 from holding Chinyang Hold or generate 16.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hyosung Advanced Materials vs. Chinyang Hold
Performance |
Timeline |
Hyosung Advanced Mat |
Chinyang Hold |
Hyosung Advanced and Chinyang Hold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hyosung Advanced and Chinyang Hold
The main advantage of trading using opposite Hyosung Advanced and Chinyang Hold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Advanced position performs unexpectedly, Chinyang Hold 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 Chinyang Hold will offset losses from the drop in Chinyang Hold's long position.Hyosung Advanced vs. Busan Industrial Co | Hyosung Advanced vs. Korea Air Svc | Hyosung Advanced vs. AnterogenCoLtd | Hyosung Advanced vs. LG Uplus |
Chinyang Hold vs. Hyosung Advanced Materials | Chinyang Hold vs. Dongbang Ship Machinery | Chinyang Hold vs. LAKE MATERIALS LTD | Chinyang Hold vs. Semyung Electric Machinery |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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