Correlation Between Seegene and Hyundai Heavy
Can any of the company-specific risk be diversified away by investing in both Seegene and Hyundai Heavy 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 Seegene and Hyundai Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seegene and Hyundai Heavy Industries, you can compare the effects of market volatilities on Seegene and Hyundai Heavy 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 Seegene with a short position of Hyundai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seegene and Hyundai Heavy.
Diversification Opportunities for Seegene and Hyundai Heavy
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Seegene and Hyundai is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Seegene and Hyundai Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Heavy Industries and Seegene 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 Seegene are associated (or correlated) with Hyundai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Heavy Industries has no effect on the direction of Seegene i.e., Seegene and Hyundai Heavy go up and down completely randomly.
Pair Corralation between Seegene and Hyundai Heavy
Assuming the 90 days trading horizon Seegene is expected to generate 1.85 times more return on investment than Hyundai Heavy. However, Seegene is 1.85 times more volatile than Hyundai Heavy Industries. It trades about 0.03 of its potential returns per unit of risk. Hyundai Heavy Industries is currently generating about 0.05 per unit of risk. If you would invest 2,215,856 in Seegene on September 3, 2024 and sell it today you would earn a total of 159,144 from holding Seegene or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seegene vs. Hyundai Heavy Industries
Performance |
| Timeline |
| Seegene |
| Hyundai Heavy Industries |
Seegene and Hyundai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seegene and Hyundai Heavy
The main advantage of trading using opposite Seegene and Hyundai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seegene position performs unexpectedly, Hyundai Heavy 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 Heavy will offset losses from the drop in Hyundai Heavy's long position.The idea behind Seegene and Hyundai Heavy Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hyundai Heavy vs. Daehan Synthetic Fiber | Hyundai Heavy vs. Posco Chemical Co | Hyundai Heavy vs. Youngbo Chemical Co | Hyundai Heavy vs. Korea Petro 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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