Correlation Between Hyundai Engineering and ITM Semiconductor
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and ITM Semiconductor 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 Engineering and ITM Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Engineering Construction and ITM Semiconductor Co, you can compare the effects of market volatilities on Hyundai Engineering and ITM Semiconductor 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 Engineering with a short position of ITM Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and ITM Semiconductor.
Diversification Opportunities for Hyundai Engineering and ITM Semiconductor
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hyundai and ITM is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Constructi and ITM Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Semiconductor and Hyundai Engineering 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 Engineering Construction are associated (or correlated) with ITM Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Semiconductor has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and ITM Semiconductor go up and down completely randomly.
Pair Corralation between Hyundai Engineering and ITM Semiconductor
Assuming the 90 days trading horizon Hyundai Engineering Construction is expected to generate 1.36 times more return on investment than ITM Semiconductor. However, Hyundai Engineering is 1.36 times more volatile than ITM Semiconductor Co. It trades about 0.37 of its potential returns per unit of risk. ITM Semiconductor Co is currently generating about 0.04 per unit of risk. If you would invest 2,550,000 in Hyundai Engineering Construction on October 28, 2024 and sell it today you would earn a total of 600,000 from holding Hyundai Engineering Construction or generate 23.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Engineering Constructi vs. ITM Semiconductor Co
Performance |
| Timeline |
| Hyundai Engineering |
| ITM Semiconductor |
Hyundai Engineering and ITM Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and ITM Semiconductor
The main advantage of trading using opposite Hyundai Engineering and ITM Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, ITM Semiconductor 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 ITM Semiconductor will offset losses from the drop in ITM Semiconductor's long position.| Hyundai Engineering vs. Nasmedia Co | Hyundai Engineering vs. Namhwa Industrial Co | Hyundai Engineering vs. Songwon Industrial Co | Hyundai Engineering vs. Dongil Metal Co |
| ITM Semiconductor vs. Seoyon Topmetal Co | ITM Semiconductor vs. Raontech | ITM Semiconductor vs. Solution Advanced Technology | ITM Semiconductor vs. PNC Technologies co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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