Correlation Between Hyundai Rotem and Sam Chun
Can any of the company-specific risk be diversified away by investing in both Hyundai Rotem and Sam Chun 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 Hyundai Rotem and Sam Chun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Rotem Co and Sam Chun Dang, you can compare the effects of market volatilities on Hyundai Rotem and Sam Chun 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 Hyundai Rotem with a short position of Sam Chun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Rotem and Sam Chun.
Diversification Opportunities for Hyundai Rotem and Sam Chun
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hyundai and Sam is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Rotem Co and Sam Chun Dang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Chun Dang and Hyundai Rotem 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 Hyundai Rotem Co are associated (or correlated) with Sam Chun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Chun Dang has no effect on the direction of Hyundai Rotem i.e., Hyundai Rotem and Sam Chun go up and down completely randomly.
Pair Corralation between Hyundai Rotem and Sam Chun
Assuming the 90 days trading horizon Hyundai Rotem is expected to generate 5.34 times less return on investment than Sam Chun. But when comparing it to its historical volatility, Hyundai Rotem Co is 3.25 times less risky than Sam Chun. It trades about 0.21 of its potential returns per unit of risk. Sam Chun Dang is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 9,600,000 in Sam Chun Dang on October 7, 2024 and sell it today you would earn a total of 5,940,000 from holding Sam Chun Dang or generate 61.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Rotem Co vs. Sam Chun Dang
Performance |
| Timeline |
| Hyundai Rotem |
| Sam Chun Dang |
Hyundai Rotem and Sam Chun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Rotem and Sam Chun
The main advantage of trading using opposite Hyundai Rotem and Sam Chun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Rotem position performs unexpectedly, Sam Chun 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 Sam Chun will offset losses from the drop in Sam Chun's long position.| Hyundai Rotem vs. Sejong Telecom | Hyundai Rotem vs. Korea Information Communications | Hyundai Rotem vs. Lotte Data Communication | Hyundai Rotem vs. ITM Semiconductor 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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