Correlation Between Hyundai and Shinil Electronics
Can any of the company-specific risk be diversified away by investing in both Hyundai and Shinil Electronics 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 Shinil Electronics 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 Shinil Electronics Co, you can compare the effects of market volatilities on Hyundai and Shinil Electronics 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 Shinil Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Shinil Electronics.
Diversification Opportunities for Hyundai and Shinil Electronics
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hyundai and Shinil is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Shinil Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinil Electronics 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 Shinil Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinil Electronics has no effect on the direction of Hyundai i.e., Hyundai and Shinil Electronics go up and down completely randomly.
Pair Corralation between Hyundai and Shinil Electronics
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 1.59 times more return on investment than Shinil Electronics. However, Hyundai is 1.59 times more volatile than Shinil Electronics Co. It trades about 0.03 of its potential returns per unit of risk. Shinil Electronics Co is currently generating about -0.09 per unit of risk. If you would invest 15,103,700 in Hyundai Motor Co on September 2, 2024 and sell it today you would earn a total of 596,300 from holding Hyundai Motor Co or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Shinil Electronics Co
Performance |
| Timeline |
| Hyundai Motor |
| Shinil Electronics |
Hyundai and Shinil Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Shinil Electronics
The main advantage of trading using opposite Hyundai and Shinil Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Shinil Electronics 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 Shinil Electronics will offset losses from the drop in Shinil Electronics' long position.| Hyundai vs. Hyundai Motor Co | Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind | Hyundai vs. Mirae Asset Daewoo |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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