Correlation Between Soulbrain Holdings and Hyundai Heavy
Can any of the company-specific risk be diversified away by investing in both Soulbrain Holdings 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 Soulbrain Holdings and Hyundai Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soulbrain Holdings Co and Hyundai Heavy Industries, you can compare the effects of market volatilities on Soulbrain Holdings 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 Soulbrain Holdings with a short position of Hyundai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soulbrain Holdings and Hyundai Heavy.
Diversification Opportunities for Soulbrain Holdings and Hyundai Heavy
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Soulbrain and Hyundai is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Soulbrain Holdings Co 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 Soulbrain 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 Soulbrain Holdings Co 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 Soulbrain Holdings i.e., Soulbrain Holdings and Hyundai Heavy go up and down completely randomly.
Pair Corralation between Soulbrain Holdings and Hyundai Heavy
Assuming the 90 days trading horizon Soulbrain Holdings Co is expected to under-perform the Hyundai Heavy. In addition to that, Soulbrain Holdings is 1.3 times more volatile than Hyundai Heavy Industries. It trades about -0.08 of its total potential returns per unit of risk. Hyundai Heavy Industries is currently generating about 0.03 per unit of volatility. If you would invest 8,260,000 in Hyundai Heavy Industries on October 26, 2024 and sell it today you would earn a total of 70,000 from holding Hyundai Heavy Industries or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Soulbrain Holdings Co vs. Hyundai Heavy Industries
Performance |
| Timeline |
| Soulbrain Holdings |
| Hyundai Heavy Industries |
Soulbrain Holdings and Hyundai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soulbrain Holdings and Hyundai Heavy
The main advantage of trading using opposite Soulbrain Holdings and Hyundai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soulbrain Holdings 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.| Soulbrain Holdings vs. SFA Engineering | Soulbrain Holdings vs. Seoul Semiconductor Co | Soulbrain Holdings vs. Wonik Ips Co |
| Hyundai Heavy vs. TJ media Co | Hyundai Heavy vs. Hankook Furniture Co | Hyundai Heavy vs. Inzi Display CoLtd | Hyundai Heavy vs. Barunson Entertainment Arts |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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