Correlation Between Sejong Telecom and Hyundai Heavy
Can any of the company-specific risk be diversified away by investing in both Sejong Telecom and Hyundai 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 Sejong Telecom and Hyundai Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sejong Telecom and Hyundai Heavy Industries, you can compare the effects of market volatilities on Sejong Telecom and Hyundai 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 Sejong Telecom with a short position of Hyundai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sejong Telecom and Hyundai Heavy.
Diversification Opportunities for Sejong Telecom and Hyundai Heavy
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sejong and Hyundai is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sejong Telecom and Hyundai Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Heavy Industries and Sejong Telecom 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 Sejong Telecom are associated (or correlated) with Hyundai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Heavy Industries has no effect on the direction of Sejong Telecom i.e., Sejong Telecom and Hyundai Heavy go up and down completely randomly.
Pair Corralation between Sejong Telecom and Hyundai Heavy
Assuming the 90 days trading horizon Sejong Telecom is expected to under-perform the Hyundai Heavy. In addition to that, Sejong Telecom is 1.79 times more volatile than Hyundai Heavy Industries. It trades about -0.04 of its total potential returns per unit of risk. Hyundai Heavy Industries is currently generating about 0.08 per unit of volatility. If you would invest 5,661,503 in Hyundai Heavy Industries on August 29, 2024 and sell it today you would earn a total of 2,348,497 from holding Hyundai Heavy Industries or generate 41.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.98% |
| Values | Daily Returns |
Sejong Telecom vs. Hyundai Heavy Industries
Performance |
| Timeline |
| Sejong Telecom |
| Hyundai Heavy Industries |
Sejong Telecom and Hyundai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sejong Telecom and Hyundai Heavy
The main advantage of trading using opposite Sejong Telecom and Hyundai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sejong Telecom position performs unexpectedly, Hyundai 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 Hyundai Heavy will offset losses from the drop in Hyundai Heavy's long position.| Sejong Telecom vs. AfreecaTV Co | Sejong Telecom vs. SS TECH | Sejong Telecom vs. Busan Industrial Co | Sejong Telecom vs. Busan Ind |
| Hyundai Heavy vs. Samsung Electronics Co | Hyundai Heavy vs. Samsung Electronics Co | Hyundai Heavy vs. Hyundai Motor Co | Hyundai Heavy vs. Hyundai Motor |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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