Correlation Between Jeju Semiconductor and Hyundai
Can any of the company-specific risk be diversified away by investing in both Jeju Semiconductor 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 Jeju Semiconductor and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Semiconductor Corp and Hyundai Motor Co, you can compare the effects of market volatilities on Jeju Semiconductor 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 Jeju Semiconductor with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Semiconductor and Hyundai.
Diversification Opportunities for Jeju Semiconductor and Hyundai
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jeju and Hyundai is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Semiconductor Corp and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Jeju Semiconductor 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 Jeju Semiconductor Corp 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 Jeju Semiconductor i.e., Jeju Semiconductor and Hyundai go up and down completely randomly.
Pair Corralation between Jeju Semiconductor and Hyundai
Assuming the 90 days trading horizon Jeju Semiconductor Corp is expected to under-perform the Hyundai. In addition to that, Jeju Semiconductor is 1.44 times more volatile than Hyundai Motor Co. It trades about -0.46 of its total potential returns per unit of risk. Hyundai Motor Co is currently generating about 0.03 per unit of volatility. If you would invest 16,850,000 in Hyundai Motor Co on August 29, 2024 and sell it today you would earn a total of 170,000 from holding Hyundai Motor Co or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Semiconductor Corp vs. Hyundai Motor Co
Performance |
| Timeline |
| Jeju Semiconductor Corp |
| Hyundai Motor |
Jeju Semiconductor and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Semiconductor and Hyundai
The main advantage of trading using opposite Jeju Semiconductor and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Semiconductor 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.| Jeju Semiconductor vs. Daou Data Corp | Jeju Semiconductor vs. Busan Industrial Co | Jeju Semiconductor vs. Busan Ind | Jeju Semiconductor vs. Shinhan WTI Futures |
| Hyundai vs. Hyundai Motor Co | Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind | Hyundai vs. Mirae Asset Daewoo |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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