Correlation Between Hyundai and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Hyundai and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on Hyundai and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and SEOJEON ELECTRIC.
Diversification Opportunities for Hyundai and SEOJEON ELECTRIC
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and SEOJEON is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC 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 SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of Hyundai i.e., Hyundai and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between Hyundai and SEOJEON ELECTRIC
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 0.81 times more return on investment than SEOJEON ELECTRIC. However, Hyundai Motor is 1.24 times less risky than SEOJEON ELECTRIC. It trades about -0.02 of its potential returns per unit of risk. SEOJEON ELECTRIC MACHINERY is currently generating about -0.24 per unit of risk. If you would invest 22,400,000 in Hyundai Motor on August 30, 2024 and sell it today you would lose (300,000) from holding Hyundai Motor or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| Hyundai Motor |
| SEOJEON ELECTRIC MAC |
Hyundai and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and SEOJEON ELECTRIC
The main advantage of trading using opposite Hyundai and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC's long position.| Hyundai vs. Korea Investment Holdings | Hyundai vs. DSC Investment | Hyundai vs. Atinum Investment Co | Hyundai vs. Lotte Non Life Insurance |
| SEOJEON ELECTRIC vs. Samsung Electronics Co | SEOJEON ELECTRIC vs. Samsung Electronics Co | SEOJEON ELECTRIC vs. KB Financial Group | SEOJEON ELECTRIC vs. Shinhan Financial Group |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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