Correlation Between Hyundai Engineering and STI
Can any of the company-specific risk be diversified away by investing in both Hyundai Engineering and STI 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 STI 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 STI Co, you can compare the effects of market volatilities on Hyundai Engineering and STI 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 STI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Engineering and STI.
Diversification Opportunities for Hyundai Engineering and STI
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hyundai and STI is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Engineering Plastics and STI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STI Co 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 STI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STI Co has no effect on the direction of Hyundai Engineering i.e., Hyundai Engineering and STI go up and down completely randomly.
Pair Corralation between Hyundai Engineering and STI
Assuming the 90 days trading horizon Hyundai Engineering Plastics is expected to generate 0.42 times more return on investment than STI. However, Hyundai Engineering Plastics is 2.36 times less risky than STI. It trades about -0.02 of its potential returns per unit of risk. STI Co is currently generating about -0.02 per unit of risk. If you would invest 410,005 in Hyundai Engineering Plastics on September 12, 2024 and sell it today you would lose (78,505) from holding Hyundai Engineering Plastics or give up 19.15% 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. STI Co
Performance |
| Timeline |
| Hyundai Engineering |
| STI Co |
Hyundai Engineering and STI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Engineering and STI
The main advantage of trading using opposite Hyundai Engineering and STI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Engineering position performs unexpectedly, STI 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 STI will offset losses from the drop in STI's long position.| Hyundai Engineering vs. Hankuk Steel Wire | Hyundai Engineering vs. Jeil Steel Mfg | Hyundai Engineering vs. Finebesteel | Hyundai Engineering vs. Dong A Steel Technology |
| STI vs. Moonbae Steel | STI vs. Dongwoo Farm To | STI vs. Hanil Iron Steel | STI vs. KCC Engineering Construction |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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