Correlation Between Hyundai Engineering and Semyung Electric
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and Semyung Electric 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 Engineering and Semyung Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Engineering Plastics and Semyung Electric Machinery, you can compare the effects of market volatilities on Hyundai Engineering and Semyung Electric 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 Engineering with a short position of Semyung Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and Semyung Electric.
Diversification Opportunities for Hyundai Engineering and Semyung Electric
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hyundai and Semyung is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Plastics and Semyung Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semyung Electric Mac and Hyundai Engineering 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 Engineering Plastics are associated (or correlated) with Semyung Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semyung Electric Mac has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and Semyung Electric go up and down completely randomly.
Pair Corralation between Hyundai Engineering and Semyung Electric
Assuming the 90 days trading horizon Hyundai Engineering Plastics is expected to generate 0.52 times more return on investment than Semyung Electric. However, Hyundai Engineering Plastics is 1.91 times less risky than Semyung Electric. It trades about -0.22 of its potential returns per unit of risk. Semyung Electric Machinery is currently generating about -0.22 per unit of risk. If you would invest 394,500 in Hyundai Engineering Plastics on September 5, 2024 and sell it today you would lose (31,000) from holding Hyundai Engineering Plastics or give up 7.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Engineering Plastics vs. Semyung Electric Machinery
Performance |
| Timeline |
| Hyundai Engineering |
| Semyung Electric Mac |
Hyundai Engineering and Semyung Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and Semyung Electric
The main advantage of trading using opposite Hyundai Engineering and Semyung Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, Semyung Electric 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 Semyung Electric will offset losses from the drop in Semyung Electric's long position.| Hyundai Engineering vs. AptaBio Therapeutics | Hyundai Engineering vs. Daewoo SBI SPAC | Hyundai Engineering vs. Dream Security co | Hyundai Engineering vs. Microfriend |
| Semyung Electric vs. PLAYWITH | Semyung Electric vs. Hyundai Engineering Plastics | Semyung Electric vs. Hana Materials | Semyung Electric vs. Lake Materials 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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