Correlation Between Koryo Credit and Hyundai Green

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

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

Diversification Opportunities for Koryo Credit and Hyundai Green

0.42

Correlation Coefficient

Koryo Credit  Hyundai Green

Very weak diversification

The 3 months correlation between Koryo and Hyundai is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Koryo Credit Information and Hyundai Green Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Green Food and Koryo Credit 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 Koryo Credit Information are associated (or correlated) with Hyundai Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Green Food has no effect on the direction of Koryo Credit i.e., Koryo Credit and Hyundai Green go up and down completely randomly.

Pair Corralation between Koryo Credit and Hyundai Green

Assuming the 90 days trading horizon Koryo Credit is expected to generate 41.97 times less return on investment than Hyundai Green. But when comparing it to its historical volatility, Koryo Credit Information is 1.72 times less risky than Hyundai Green. It trades about 0.01 of its potential returns per unit of risk. Hyundai Green Food is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  1,186,000  in Hyundai Green Food on September 25, 2024 and sell it today you would earn a total of  372,000  from holding Hyundai Green Food or generate 31.37% return on investment over 90 days.

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

Koryo Credit Information  vs.  Hyundai Green Food

Koryo Credit Information

Risk-Adjusted Performance

0 of 100

Very Weak

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

Hyundai Green Food

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hyundai Green Food are ranked lower than 21 (%) 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.

Pair Trading with Koryo Credit and Hyundai Green

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

The idea behind Koryo Credit Information and Hyundai Green Food 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.