Correlation Between SS TECH and Hyundai Heavy
Can any of the company-specific risk be diversified away by investing in both SS TECH 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 SS TECH and Hyundai Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SS TECH and Hyundai Heavy Industries, you can compare the effects of market volatilities on SS TECH 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 SS TECH with a short position of Hyundai Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SS TECH and Hyundai Heavy.
Diversification Opportunities for SS TECH and Hyundai Heavy
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 101490 and Hyundai is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding SS TECH 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 SS TECH 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 SS TECH 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 SS TECH i.e., SS TECH and Hyundai Heavy go up and down completely randomly.
Pair Corralation between SS TECH and Hyundai Heavy
Assuming the 90 days trading horizon SS TECH is expected to under-perform the Hyundai Heavy. In addition to that, SS TECH is 1.51 times more volatile than Hyundai Heavy Industries. It trades about -0.06 of its total potential returns per unit of risk. Hyundai Heavy Industries is currently generating about -0.01 per unit of volatility. If you would invest 8,110,870 in Hyundai Heavy Industries on August 25, 2024 and sell it today you would lose (140,870) from holding Hyundai Heavy Industries or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SS TECH vs. Hyundai Heavy Industries
Performance |
| Timeline |
| SS TECH |
| Hyundai Heavy Industries |
SS TECH and Hyundai Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SS TECH and Hyundai Heavy
The main advantage of trading using opposite SS TECH and Hyundai Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SS TECH 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.| SS TECH vs. Korea Real Estate | SS TECH vs. Korea Ratings Co | SS TECH vs. IQuest Co | SS TECH vs. Wonbang Tech Co |
| Hyundai Heavy vs. ECSTELECOM Co | Hyundai Heavy vs. Kisan Telecom Co | Hyundai Heavy vs. BNK Financial Group | Hyundai Heavy vs. Dgb Financial |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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