Correlation Between Hyundai and Sangsangin Investment
Can any of the company-specific risk be diversified away by investing in both Hyundai and Sangsangin Investment 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 Sangsangin Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor Co and Sangsangin Investment Securities, you can compare the effects of market volatilities on Hyundai and Sangsangin Investment 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 Sangsangin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Sangsangin Investment.
Diversification Opportunities for Hyundai and Sangsangin Investment
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hyundai and Sangsangin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Sangsangin Investment Securiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsangin Investment 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 Co are associated (or correlated) with Sangsangin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsangin Investment has no effect on the direction of Hyundai i.e., Hyundai and Sangsangin Investment go up and down completely randomly.
Pair Corralation between Hyundai and Sangsangin Investment
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 1.21 times more return on investment than Sangsangin Investment. However, Hyundai is 1.21 times more volatile than Sangsangin Investment Securities. It trades about -0.05 of its potential returns per unit of risk. Sangsangin Investment Securities is currently generating about -0.19 per unit of risk. If you would invest 17,771,400 in Hyundai Motor Co on September 29, 2024 and sell it today you would lose (2,411,400) from holding Hyundai Motor Co or give up 13.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Sangsangin Investment Securiti
Performance |
| Timeline |
| Hyundai Motor |
| Sangsangin Investment |
Hyundai and Sangsangin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Sangsangin Investment
The main advantage of trading using opposite Hyundai and Sangsangin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Sangsangin Investment 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 Sangsangin Investment will offset losses from the drop in Sangsangin Investment's long position.| Hyundai vs. LG Household Healthcare | Hyundai vs. Daejoo Electronic Materials | Hyundai vs. TOPMATERIAL LTD | Hyundai vs. Union Materials Corp |
| Sangsangin Investment vs. KB Financial Group | Sangsangin Investment vs. Hyundai Motor | Sangsangin Investment vs. Hyundai Motor Co | Sangsangin Investment vs. Hyundai Motor Co |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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