Correlation Between Hyundai Glovis and Sungdo Engineering
Can any of the company-specific risk be diversified away by investing in both Hyundai Glovis and Sungdo Engineering 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 Glovis and Sungdo Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Glovis and Sungdo Engineering Construction, you can compare the effects of market volatilities on Hyundai Glovis and Sungdo Engineering 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 Glovis with a short position of Sungdo Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Glovis and Sungdo Engineering.
Diversification Opportunities for Hyundai Glovis and Sungdo Engineering
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyundai and Sungdo is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Glovis and Sungdo Engineering Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungdo Engineering and Hyundai Glovis 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 Glovis are associated (or correlated) with Sungdo Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungdo Engineering has no effect on the direction of Hyundai Glovis i.e., Hyundai Glovis and Sungdo Engineering go up and down completely randomly.
Pair Corralation between Hyundai Glovis and Sungdo Engineering
Assuming the 90 days trading horizon Hyundai Glovis is expected to under-perform the Sungdo Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Glovis is 1.07 times less risky than Sungdo Engineering. The stock trades about -0.12 of its potential returns per unit of risk. The Sungdo Engineering Construction is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 406,000 in Sungdo Engineering Construction on November 27, 2024 and sell it today you would earn a total of 16,500 from holding Sungdo Engineering Construction or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Hyundai Glovis vs. Sungdo Engineering Constructio
Performance |
| Timeline |
| Hyundai Glovis |
| Sungdo Engineering |
Hyundai Glovis and Sungdo Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Glovis and Sungdo Engineering
The main advantage of trading using opposite Hyundai Glovis and Sungdo Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Glovis position performs unexpectedly, Sungdo Engineering 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 Sungdo Engineering will offset losses from the drop in Sungdo Engineering's long position.| Hyundai Glovis vs. Dongkuk Structures Construction | Hyundai Glovis vs. Korea Steel Co | Hyundai Glovis vs. Samlip General Foods | Hyundai Glovis vs. GS Engineering Construction |
| Sungdo Engineering vs. Silicon2 Co | Sungdo Engineering vs. Hanil Chemical Ind | Sungdo Engineering vs. Hannong Chemicals | Sungdo Engineering vs. TK Chemical |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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