Correlation Between Sangsin Energy and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both Sangsin Energy and Hyundai 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 Sangsin Energy and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sangsin Energy Display and Hyundai Engineering Construction, you can compare the effects of market volatilities on Sangsin Energy and Hyundai 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 Sangsin Energy with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsin Energy and Hyundai Engineering.
Diversification Opportunities for Sangsin Energy and Hyundai Engineering
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sangsin and Hyundai is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sangsin Energy Display and Hyundai Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and Sangsin Energy 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 Sangsin Energy Display are associated (or correlated) with Hyundai Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Engineering has no effect on the direction of Sangsin Energy i.e., Sangsin Energy and Hyundai Engineering go up and down completely randomly.
Pair Corralation between Sangsin Energy and Hyundai Engineering
Assuming the 90 days trading horizon Sangsin Energy Display is expected to under-perform the Hyundai Engineering. In addition to that, Sangsin Energy is 1.62 times more volatile than Hyundai Engineering Construction. It trades about -0.12 of its total potential returns per unit of risk. Hyundai Engineering Construction is currently generating about -0.12 per unit of volatility. If you would invest 3,115,000 in Hyundai Engineering Construction on October 18, 2024 and sell it today you would lose (525,000) from holding Hyundai Engineering Construction or give up 16.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sangsin Energy Display vs. Hyundai Engineering Constructi
Performance |
| Timeline |
| Sangsin Energy Display |
| Hyundai Engineering |
Sangsin Energy and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sangsin Energy and Hyundai Engineering
The main advantage of trading using opposite Sangsin Energy and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsin Energy position performs unexpectedly, Hyundai 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 Hyundai Engineering will offset losses from the drop in Hyundai Engineering's long position.| Sangsin Energy vs. SCI Information Service | Sangsin Energy vs. Alton Sports CoLtd | Sangsin Energy vs. Inzi Display CoLtd | Sangsin Energy vs. Grand Korea Leisure |
| Hyundai Engineering vs. TK Chemical | Hyundai Engineering vs. Sangsin Energy Display | Hyundai Engineering vs. KPX Green Chemical | Hyundai Engineering vs. Hanil Chemical Ind |
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 Stocks Directory module to find actively traded stocks across global markets.
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