Correlation Between Hyundai and Hanmi Semicon
Can any of the company-specific risk be diversified away by investing in both Hyundai and Hanmi Semicon 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 Hanmi Semicon 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 Hanmi Semicon, you can compare the effects of market volatilities on Hyundai and Hanmi Semicon 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 Hanmi Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Hanmi Semicon.
Diversification Opportunities for Hyundai and Hanmi Semicon
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Hanmi is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Hanmi Semicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanmi Semicon 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 Hanmi Semicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanmi Semicon has no effect on the direction of Hyundai i.e., Hyundai and Hanmi Semicon go up and down completely randomly.
Pair Corralation between Hyundai and Hanmi Semicon
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.73 times more return on investment than Hanmi Semicon. However, Hyundai Motor Co is 1.37 times less risky than Hanmi Semicon. It trades about -0.04 of its potential returns per unit of risk. Hanmi Semicon is currently generating about -0.38 per unit of risk. If you would invest 16,360,000 in Hyundai Motor Co on September 2, 2024 and sell it today you would lose (340,000) from holding Hyundai Motor Co or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Hanmi Semicon
Performance |
| Timeline |
| Hyundai Motor |
| Hanmi Semicon |
Hyundai and Hanmi Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Hanmi Semicon
The main advantage of trading using opposite Hyundai and Hanmi Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Hanmi Semicon 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 Hanmi Semicon will offset losses from the drop in Hanmi Semicon's long position.| Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind | Hyundai vs. Mirae Asset Daewoo | Hyundai vs. Shinhan WTI Futures |
| Hanmi Semicon vs. Samsung Electronics Co | Hanmi Semicon vs. Samsung Electronics Co | Hanmi Semicon vs. LG Energy Solution | Hanmi Semicon vs. SK Hynix |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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