Correlation Between Sung Bo and Hyundai Industrial
Can any of the company-specific risk be diversified away by investing in both Sung Bo and Hyundai Industrial 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 Sung Bo and Hyundai Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sung Bo Chemicals and Hyundai Industrial Co, you can compare the effects of market volatilities on Sung Bo and Hyundai Industrial 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 Sung Bo with a short position of Hyundai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and Hyundai Industrial.
Diversification Opportunities for Sung Bo and Hyundai Industrial
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sung and Hyundai is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and Hyundai Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Industrial and Sung Bo 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 Sung Bo Chemicals are associated (or correlated) with Hyundai Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Industrial has no effect on the direction of Sung Bo i.e., Sung Bo and Hyundai Industrial go up and down completely randomly.
Pair Corralation between Sung Bo and Hyundai Industrial
Assuming the 90 days trading horizon Sung Bo is expected to generate 1.66 times less return on investment than Hyundai Industrial. But when comparing it to its historical volatility, Sung Bo Chemicals is 1.02 times less risky than Hyundai Industrial. It trades about 0.23 of its potential returns per unit of risk. Hyundai Industrial Co is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 484,351 in Hyundai Industrial Co on October 17, 2024 and sell it today you would earn a total of 38,649 from holding Hyundai Industrial Co or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sung Bo Chemicals vs. Hyundai Industrial Co
Performance |
| Timeline |
| Sung Bo Chemicals |
| Hyundai Industrial |
Sung Bo and Hyundai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and Hyundai Industrial
The main advantage of trading using opposite Sung Bo and Hyundai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, Hyundai Industrial 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 Industrial will offset losses from the drop in Hyundai Industrial's long position.| Sung Bo vs. Hankook Steel Co | Sung Bo vs. Golden Bridge Investment | Sung Bo vs. Daelim Trading Co | Sung Bo vs. Woori Technology Investment |
| Hyundai Industrial vs. Hankukpackage Co | Hyundai Industrial vs. Choil Aluminum | Hyundai Industrial vs. Dongil Metal Co | Hyundai Industrial vs. Sung Bo Chemicals |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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