Correlation Between Seohee Construction and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both Seohee Construction 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 Seohee Construction and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seohee Construction Co and Hyundai Engineering Plastics, you can compare the effects of market volatilities on Seohee Construction 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 Seohee Construction with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seohee Construction and Hyundai Engineering.
Diversification Opportunities for Seohee Construction and Hyundai Engineering
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seohee and Hyundai is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Seohee Construction Co and Hyundai Engineering Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and Seohee Construction 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 Seohee Construction Co 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 Seohee Construction i.e., Seohee Construction and Hyundai Engineering go up and down completely randomly.
Pair Corralation between Seohee Construction and Hyundai Engineering
Assuming the 90 days trading horizon Seohee Construction Co is expected to generate 0.94 times more return on investment than Hyundai Engineering. However, Seohee Construction Co is 1.06 times less risky than Hyundai Engineering. It trades about 0.06 of its potential returns per unit of risk. Hyundai Engineering Plastics is currently generating about 0.0 per unit of risk. If you would invest 112,602 in Seohee Construction Co on September 26, 2024 and sell it today you would earn a total of 53,398 from holding Seohee Construction Co or generate 47.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seohee Construction Co vs. Hyundai Engineering Plastics
Performance |
| Timeline |
| Seohee Construction |
| Hyundai Engineering |
Seohee Construction and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seohee Construction and Hyundai Engineering
The main advantage of trading using opposite Seohee Construction and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seohee Construction 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.| Seohee Construction vs. Busan Industrial Co | Seohee Construction vs. Busan Ind | Seohee Construction vs. Mirae Asset Daewoo | Seohee Construction vs. Shinhan WTI Futures |
| Hyundai Engineering vs. Seoam Machinery Industry | Hyundai Engineering vs. Sungdo Engineering Construction | Hyundai Engineering vs. Semyung Electric Machinery | Hyundai Engineering vs. Seohee Construction Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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