Correlation Between Seoul Electronics and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both Seoul Electronics and Hyundai Engineering 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 Seoul Electronics and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Electronics Telecom and Hyundai Engineering Construction, you can compare the effects of market volatilities on Seoul Electronics and Hyundai Engineering 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 Seoul Electronics with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Electronics and Hyundai Engineering.
Diversification Opportunities for Seoul Electronics and Hyundai Engineering
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Seoul and Hyundai is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Electronics Telecom and Hyundai Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and Seoul Electronics 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 Seoul Electronics Telecom are associated (or correlated) with Hyundai Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Engineering has no effect on the direction of Seoul Electronics i.e., Seoul Electronics and Hyundai Engineering go up and down completely randomly.
Pair Corralation between Seoul Electronics and Hyundai Engineering
Assuming the 90 days trading horizon Seoul Electronics Telecom is expected to under-perform the Hyundai Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Seoul Electronics Telecom is 1.49 times less risky than Hyundai Engineering. The stock trades about -0.28 of its potential returns per unit of risk. The Hyundai Engineering Construction is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,590,000 in Hyundai Engineering Construction on November 6, 2024 and sell it today you would earn a total of 490,000 from holding Hyundai Engineering Construction or generate 18.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Electronics Telecom vs. Hyundai Engineering Constructi
Performance |
| Timeline |
| Seoul Electronics Telecom |
| Hyundai Engineering |
Seoul Electronics and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Electronics and Hyundai Engineering
The main advantage of trading using opposite Seoul Electronics and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Electronics position performs unexpectedly, Hyundai Engineering 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 Engineering will offset losses from the drop in Hyundai Engineering's long position.| Seoul Electronics vs. DONGKUK TED METAL | Seoul Electronics vs. CKH Food Health | Seoul Electronics vs. NewFlex Technology Co | Seoul Electronics vs. Global Standard Technology |
| Hyundai Engineering vs. Daehan Steel | Hyundai Engineering vs. Dongil Steel Co | Hyundai Engineering vs. Nature and Environment | Hyundai Engineering vs. Narae Nanotech Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |