Correlation Between SBI Investment and Hyundai Mobis
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Hyundai Mobis 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 SBI Investment and Hyundai Mobis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Investment KOREA and Hyundai Mobis, you can compare the effects of market volatilities on SBI Investment and Hyundai Mobis 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 SBI Investment with a short position of Hyundai Mobis. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Hyundai Mobis.
Diversification Opportunities for SBI Investment and Hyundai Mobis
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBI and Hyundai is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Hyundai Mobis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Mobis and SBI Investment 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 SBI Investment KOREA are associated (or correlated) with Hyundai Mobis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Mobis has no effect on the direction of SBI Investment i.e., SBI Investment and Hyundai Mobis go up and down completely randomly.
Pair Corralation between SBI Investment and Hyundai Mobis
Assuming the 90 days trading horizon SBI Investment KOREA is expected to under-perform the Hyundai Mobis. In addition to that, SBI Investment is 1.28 times more volatile than Hyundai Mobis. It trades about -0.04 of its total potential returns per unit of risk. Hyundai Mobis is currently generating about 0.02 per unit of volatility. If you would invest 22,804,100 in Hyundai Mobis on August 28, 2024 and sell it today you would earn a total of 1,845,900 from holding Hyundai Mobis or generate 8.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
SBI Investment KOREA vs. Hyundai Mobis
Performance |
| Timeline |
| SBI Investment KOREA |
| Hyundai Mobis |
SBI Investment and Hyundai Mobis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and Hyundai Mobis
The main advantage of trading using opposite SBI Investment and Hyundai Mobis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Hyundai Mobis 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 Hyundai Mobis will offset losses from the drop in Hyundai Mobis' long position.| SBI Investment vs. Daekyung Machinery Engineering | SBI Investment vs. PlayD Co | SBI Investment vs. Playgram Co | SBI Investment vs. Camus Engineering Construction |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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