Correlation Between ITM Semiconductor and Hyundai Rotem
Can any of the company-specific risk be diversified away by investing in both ITM Semiconductor and Hyundai Rotem 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 ITM Semiconductor and Hyundai Rotem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITM Semiconductor Co and Hyundai Rotem Co, you can compare the effects of market volatilities on ITM Semiconductor and Hyundai Rotem 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 ITM Semiconductor with a short position of Hyundai Rotem. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Semiconductor and Hyundai Rotem.
Diversification Opportunities for ITM Semiconductor and Hyundai Rotem
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ITM and Hyundai is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding ITM Semiconductor Co and Hyundai Rotem Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Rotem and ITM 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 ITM Semiconductor Co are associated (or correlated) with Hyundai Rotem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Rotem has no effect on the direction of ITM Semiconductor i.e., ITM Semiconductor and Hyundai Rotem go up and down completely randomly.
Pair Corralation between ITM Semiconductor and Hyundai Rotem
Assuming the 90 days trading horizon ITM Semiconductor Co is expected to under-perform the Hyundai Rotem. In addition to that, ITM Semiconductor is 1.42 times more volatile than Hyundai Rotem Co. It trades about -0.04 of its total potential returns per unit of risk. Hyundai Rotem Co is currently generating about 0.44 per unit of volatility. If you would invest 4,445,000 in Hyundai Rotem Co on October 9, 2024 and sell it today you would earn a total of 785,000 from holding Hyundai Rotem Co or generate 17.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITM Semiconductor Co vs. Hyundai Rotem Co
Performance |
| Timeline |
| ITM Semiconductor |
| Hyundai Rotem |
ITM Semiconductor and Hyundai Rotem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITM Semiconductor and Hyundai Rotem
The main advantage of trading using opposite ITM Semiconductor and Hyundai Rotem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITM Semiconductor position performs unexpectedly, Hyundai Rotem 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 Rotem will offset losses from the drop in Hyundai Rotem's long position.| ITM Semiconductor vs. Industrial Bank | ITM Semiconductor vs. Lotte Non Life Insurance | ITM Semiconductor vs. Samsung Life Insurance | ITM Semiconductor vs. Pureun Mutual Savings |
| Hyundai Rotem vs. Kyung Chang Industrial | Hyundai Rotem vs. Asiana Airlines | Hyundai Rotem vs. Jinro Distillers Co | Hyundai Rotem vs. PI Advanced Materials |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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