Correlation Between Hyundai and Shinsung Delta
Can any of the company-specific risk be diversified away by investing in both Hyundai and Shinsung Delta 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 Shinsung Delta 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 Shinsung Delta Tech, you can compare the effects of market volatilities on Hyundai and Shinsung Delta 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 Shinsung Delta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Shinsung Delta.
Diversification Opportunities for Hyundai and Shinsung Delta
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hyundai and Shinsung is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Shinsung Delta Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsung Delta Tech 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 Shinsung Delta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsung Delta Tech has no effect on the direction of Hyundai i.e., Hyundai and Shinsung Delta go up and down completely randomly.
Pair Corralation between Hyundai and Shinsung Delta
Assuming the 90 days trading horizon Hyundai is expected to generate 33.47 times less return on investment than Shinsung Delta. But when comparing it to its historical volatility, Hyundai Motor Co is 3.39 times less risky than Shinsung Delta. It trades about 0.03 of its potential returns per unit of risk. Shinsung Delta Tech is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 4,495,000 in Shinsung Delta Tech on August 29, 2024 and sell it today you would earn a total of 2,255,000 from holding Shinsung Delta Tech or generate 50.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Shinsung Delta Tech
Performance |
| Timeline |
| Hyundai Motor |
| Shinsung Delta Tech |
Hyundai and Shinsung Delta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Shinsung Delta
The main advantage of trading using opposite Hyundai and Shinsung Delta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Shinsung Delta 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 Shinsung Delta will offset losses from the drop in Shinsung Delta's long position.| Hyundai vs. Lake Materials Co | Hyundai vs. KB Financial Group | Hyundai vs. Jeju Air Co | Hyundai vs. LAKE MATERIALS LTD |
| Shinsung Delta vs. Samsung Electronics Co | Shinsung Delta vs. Samsung Electronics Co | Shinsung Delta vs. Hyundai Motor Co | Shinsung Delta vs. Hyundai Motor |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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