Correlation Between Shinsegae Information and Hyundai Industrial
Can any of the company-specific risk be diversified away by investing in both Shinsegae Information and Hyundai Industrial 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 Industrial 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 Industrial Co, you can compare the effects of market volatilities on Shinsegae Information and Hyundai Industrial 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 Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Information and Hyundai Industrial.
Diversification Opportunities for Shinsegae Information and Hyundai Industrial
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shinsegae and Hyundai is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Information Communic and Hyundai Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Industrial 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 Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Industrial has no effect on the direction of Shinsegae Information i.e., Shinsegae Information and Hyundai Industrial go up and down completely randomly.
Pair Corralation between Shinsegae Information and Hyundai Industrial
Assuming the 90 days trading horizon Shinsegae Information Communication is expected to under-perform the Hyundai Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Shinsegae Information Communication is 1.48 times less risky than Hyundai Industrial. The stock trades about -0.04 of its potential returns per unit of risk. The Hyundai Industrial Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 645,784 in Hyundai Industrial Co on September 2, 2024 and sell it today you would lose (140,784) from holding Hyundai Industrial Co or give up 21.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Information Communic vs. Hyundai Industrial Co
Performance |
| Timeline |
| Shinsegae Information |
| Hyundai Industrial |
Shinsegae Information and Hyundai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Information and Hyundai Industrial
The main advantage of trading using opposite Shinsegae Information and Hyundai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Information position performs unexpectedly, Hyundai Industrial 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 Industrial will offset losses from the drop in Hyundai Industrial's long position.| Shinsegae Information vs. AptaBio Therapeutics | Shinsegae Information vs. Daewoo SBI SPAC | Shinsegae Information vs. Dream Security co | Shinsegae Information vs. Microfriend |
| Hyundai Industrial vs. LG Display | Hyundai Industrial vs. Hyundai Motor Co | Hyundai Industrial vs. Hyundai Motor Co | Hyundai Industrial vs. Adaptive Plasma Technology |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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