Correlation Between SK Holdings and Hyosung Heavy
Can any of the company-specific risk be diversified away by investing in both SK Holdings and Hyosung Heavy 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 SK Holdings and Hyosung Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Holdings Co and Hyosung Heavy Industries, you can compare the effects of market volatilities on SK Holdings and Hyosung Heavy 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 SK Holdings with a short position of Hyosung Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Holdings and Hyosung Heavy.
Diversification Opportunities for SK Holdings and Hyosung Heavy
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between 034730 and Hyosung is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SK Holdings Co and Hyosung Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Heavy Industries and SK Holdings 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 SK Holdings Co are associated (or correlated) with Hyosung Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Heavy Industries has no effect on the direction of SK Holdings i.e., SK Holdings and Hyosung Heavy go up and down completely randomly.
Pair Corralation between SK Holdings and Hyosung Heavy
Assuming the 90 days trading horizon SK Holdings is expected to generate 2.85 times less return on investment than Hyosung Heavy. But when comparing it to its historical volatility, SK Holdings Co is 1.73 times less risky than Hyosung Heavy. It trades about 0.1 of its potential returns per unit of risk. Hyosung Heavy Industries is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 42,450,000 in Hyosung Heavy Industries on October 24, 2024 and sell it today you would earn a total of 4,150,000 from holding Hyosung Heavy Industries or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Holdings Co vs. Hyosung Heavy Industries
Performance |
| Timeline |
| SK Holdings |
| Hyosung Heavy Industries |
SK Holdings and Hyosung Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Holdings and Hyosung Heavy
The main advantage of trading using opposite SK Holdings and Hyosung Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Holdings position performs unexpectedly, Hyosung Heavy 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 Hyosung Heavy will offset losses from the drop in Hyosung Heavy's long position.| SK Holdings vs. Daewon Media Co | SK Holdings vs. YG Entertainment | SK Holdings vs. Samsung Life Insurance | SK Holdings vs. MEDIANA CoLtd |
| Hyosung Heavy vs. INSUN Environmental New | Hyosung Heavy vs. Husteel | Hyosung Heavy vs. Hanshin Construction Co | Hyosung Heavy vs. Hankuk Steel Wire |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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