Correlation Between Hyundai Green and Kiwoom

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

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

Diversification Opportunities for Hyundai Green and Kiwoom

-0.72

Correlation Coefficient

Hyundai Green  Kiwoom

Pay attention - limited upside

The 3 months correlation between Hyundai and Kiwoom is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Green Food and Kiwoom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiwoom and Hyundai Green 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 Green Food are associated (or correlated) with Kiwoom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiwoom has no effect on the direction of Hyundai Green i.e., Hyundai Green and Kiwoom go up and down completely randomly.

Pair Corralation between Hyundai Green and Kiwoom

Assuming the 90 days trading horizon Hyundai Green is expected to generate 2.64 times less return on investment than Kiwoom. In addition to that, Hyundai Green is 1.02 times more volatile than Kiwoom. It trades about 0.1 of its total potential returns per unit of risk. Kiwoom is currently generating about 0.28 per unit of volatility. If you would invest  10,491,800  in Kiwoom on October 10, 2024 and sell it today you would earn a total of  1,528,200  from holding Kiwoom or generate 14.57% return on investment over 90 days.

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

Hyundai Green Food  vs.  Kiwoom

Hyundai Green Food

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hyundai Green Food are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hyundai Green sustained solid returns over the last few months and may actually be approaching a breakup point.

Kiwoom

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Hyundai Green and Kiwoom

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

The idea behind Hyundai Green Food and Kiwoom 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.