Correlation Between Shinsegae Information and Hyundai Rotem
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Hyundai Rotem 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 Shinsegae Information and Hyundai Rotem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Information Communication and Hyundai Rotem Co, you can compare the effects of market volatilities on Shinsegae Information and Hyundai Rotem 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 Shinsegae Information with a short position of Hyundai Rotem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Hyundai Rotem.
Diversification Opportunities for Shinsegae Information and Hyundai Rotem
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shinsegae and Hyundai is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Hyundai Rotem Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Rotem and Shinsegae Information 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 Shinsegae Information Communication are associated (or correlated) with Hyundai Rotem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Rotem has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Hyundai Rotem go up and down completely randomly.
Pair Corralation between Shinsegae Information and Hyundai Rotem
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to under-perform the Hyundai Rotem. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Information Communication is 1.91 times less risky than Hyundai Rotem. The stock trades about -0.06 of its potential returns per unit of risk. The Hyundai Rotem Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,654,630 in Hyundai Rotem Co on September 14, 2024 and sell it today you would earn a total of 2,310,370 from holding Hyundai Rotem Co or generate 87.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Information Communic vs. Hyundai Rotem Co
Performance |
| Timeline |
| Shinsegae Information |
| Hyundai Rotem |
Shinsegae Information and Hyundai Rotem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Hyundai Rotem
The main advantage of trading using opposite Shinsegae Information and Hyundai Rotem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Hyundai Rotem 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 Rotem will offset losses from the drop in Hyundai Rotem's long position.| Shinsegae Information vs. Samsung Electronics Co | Shinsegae Information vs. Samsung Electronics Co | Shinsegae Information vs. SK Hynix | Shinsegae Information vs. POSCO Holdings |
| Hyundai Rotem vs. Automobile Pc | Hyundai Rotem vs. Chorokbaem Healthcare Co | Hyundai Rotem vs. Sangsin Energy Display | Hyundai Rotem vs. LG Household Healthcare |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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