Correlation Between Hyundai and Sung Bo
Can any of the company-specific risk be diversified away by investing in both Hyundai and Sung Bo 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 and Sung Bo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Sung Bo Chemicals, you can compare the effects of market volatilities on Hyundai and Sung Bo 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 with a short position of Sung Bo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Sung Bo.
Diversification Opportunities for Hyundai and Sung Bo
Poor diversification
The 3 months correlation between Hyundai and Sung is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Sung Bo Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sung Bo Chemicals and Hyundai 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 Motor are associated (or correlated) with Sung Bo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sung Bo Chemicals has no effect on the direction of Hyundai i.e., Hyundai and Sung Bo go up and down completely randomly.
Pair Corralation between Hyundai and Sung Bo
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 3.6 times more return on investment than Sung Bo. However, Hyundai is 3.6 times more volatile than Sung Bo Chemicals. It trades about 0.04 of its potential returns per unit of risk. Sung Bo Chemicals is currently generating about -0.34 per unit of risk. If you would invest 21,500,000 in Hyundai Motor on September 1, 2024 and sell it today you would earn a total of 350,000 from holding Hyundai Motor or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Sung Bo Chemicals
Performance |
| Timeline |
| Hyundai Motor |
| Sung Bo Chemicals |
Hyundai and Sung Bo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Sung Bo
The main advantage of trading using opposite Hyundai and Sung Bo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Sung Bo 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 Sung Bo will offset losses from the drop in Sung Bo's long position.| Hyundai vs. LG Display | Hyundai vs. Hyundai Motor Co | Hyundai vs. Hyundai Motor Co | Hyundai vs. Adaptive Plasma Technology |
| Sung Bo vs. AptaBio Therapeutics | Sung Bo vs. Daewoo SBI SPAC | Sung Bo vs. Dream Security co | Sung Bo vs. Microfriend |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |