Correlation Between KT Submarine and Hyundai
Can any of the company-specific risk be diversified away by investing in both KT Submarine and Hyundai 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 KT Submarine and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Submarine Telecom and Hyundai Motor Co, you can compare the effects of market volatilities on KT Submarine and Hyundai 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 KT Submarine with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT Submarine and Hyundai.
Diversification Opportunities for KT Submarine and Hyundai
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 060370 and Hyundai is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding KT Submarine Telecom and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and KT Submarine 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 KT Submarine Telecom are associated (or correlated) with Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of KT Submarine i.e., KT Submarine and Hyundai go up and down completely randomly.
Pair Corralation between KT Submarine and Hyundai
Assuming the 90 days trading horizon KT Submarine Telecom is expected to generate 3.0 times more return on investment than Hyundai. However, KT Submarine is 3.0 times more volatile than Hyundai Motor Co. It trades about 0.09 of its potential returns per unit of risk. Hyundai Motor Co is currently generating about 0.05 per unit of risk. If you would invest 1,326,000 in KT Submarine Telecom on September 13, 2024 and sell it today you would earn a total of 112,000 from holding KT Submarine Telecom or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KT Submarine Telecom vs. Hyundai Motor Co
Performance |
| Timeline |
| KT Submarine Telecom |
| Hyundai Motor |
KT Submarine and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT Submarine and Hyundai
The main advantage of trading using opposite KT Submarine and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT Submarine position performs unexpectedly, Hyundai 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 will offset losses from the drop in Hyundai's long position.| KT Submarine vs. Samsung Electronics Co | KT Submarine vs. Samsung Electronics Co | KT Submarine vs. SK Hynix | KT Submarine vs. POSCO Holdings |
| Hyundai vs. Hyundai Motor Co | Hyundai vs. Solution Advanced Technology | Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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