Correlation Between Hyundai and SHINWON STRUCTION
Can any of the company-specific risk be diversified away by investing in both Hyundai and SHINWON STRUCTION 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 SHINWON STRUCTION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and SHINWON STRUCTION COMPANY, you can compare the effects of market volatilities on Hyundai and SHINWON STRUCTION 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 SHINWON STRUCTION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and SHINWON STRUCTION.
Diversification Opportunities for Hyundai and SHINWON STRUCTION
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and SHINWON is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and SHINWON STRUCTION COMPANY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHINWON STRUCTION PANY 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 SHINWON STRUCTION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHINWON STRUCTION PANY has no effect on the direction of Hyundai i.e., Hyundai and SHINWON STRUCTION go up and down completely randomly.
Pair Corralation between Hyundai and SHINWON STRUCTION
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the SHINWON STRUCTION. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Motor is 1.99 times less risky than SHINWON STRUCTION. The stock trades about -0.04 of its potential returns per unit of risk. The SHINWON STRUCTION COMPANY is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 277,000 in SHINWON STRUCTION COMPANY on August 28, 2024 and sell it today you would earn a total of 18,000 from holding SHINWON STRUCTION COMPANY or generate 6.5% 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. SHINWON STRUCTION COMPANY
Performance |
| Timeline |
| Hyundai Motor |
| SHINWON STRUCTION PANY |
Hyundai and SHINWON STRUCTION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and SHINWON STRUCTION
The main advantage of trading using opposite Hyundai and SHINWON STRUCTION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, SHINWON STRUCTION 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 SHINWON STRUCTION will offset losses from the drop in SHINWON STRUCTION's long position.| Hyundai vs. InnoTherapy | Hyundai vs. Sung Bo Chemicals | Hyundai vs. LG Chemicals | Hyundai vs. Namhae Chemical |
| SHINWON STRUCTION vs. Samsung Electronics Co | SHINWON STRUCTION vs. Samsung Electronics Co | SHINWON STRUCTION vs. Hyundai Motor Co | SHINWON STRUCTION vs. Hyundai Motor |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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