Correlation Between Hyundai and Samjin LND
Can any of the company-specific risk be diversified away by investing in both Hyundai and Samjin LND 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 Samjin LND into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Samjin LND Co, you can compare the effects of market volatilities on Hyundai and Samjin LND 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 Samjin LND. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Samjin LND.
Diversification Opportunities for Hyundai and Samjin LND
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hyundai and Samjin is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Samjin LND Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samjin LND 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 Samjin LND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samjin LND has no effect on the direction of Hyundai i.e., Hyundai and Samjin LND go up and down completely randomly.
Pair Corralation between Hyundai and Samjin LND
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 0.52 times more return on investment than Samjin LND. However, Hyundai Motor is 1.92 times less risky than Samjin LND. It trades about 0.03 of its potential returns per unit of risk. Samjin LND Co is currently generating about -0.17 per unit of risk. If you would invest 20,700,000 in Hyundai Motor on September 13, 2024 and sell it today you would earn a total of 200,000 from holding Hyundai Motor or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Samjin LND Co
Performance |
| Timeline |
| Hyundai Motor |
| Samjin LND |
Hyundai and Samjin LND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Samjin LND
The main advantage of trading using opposite Hyundai and Samjin LND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Samjin LND 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 Samjin LND will offset losses from the drop in Samjin LND's long position.| Hyundai vs. Daou Data Corp | Hyundai vs. Solution Advanced Technology | Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind |
| Samjin LND vs. Korean Air Lines | Samjin LND vs. Dongbu Insurance Co | Samjin LND vs. Incar Financial Service | Samjin LND vs. Lotte Non Life Insurance |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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