Correlation Between Hyundai Industrial and Seah Steel
Can any of the company-specific risk be diversified away by investing in both Hyundai Industrial and Seah Steel 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 Industrial and Seah Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Industrial Co and Seah Steel Corp, you can compare the effects of market volatilities on Hyundai Industrial and Seah Steel 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 Industrial with a short position of Seah Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Industrial and Seah Steel.
Diversification Opportunities for Hyundai Industrial and Seah Steel
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hyundai and Seah is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Industrial Co and Seah Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seah Steel Corp and Hyundai Industrial 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 Industrial Co are associated (or correlated) with Seah Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seah Steel Corp has no effect on the direction of Hyundai Industrial i.e., Hyundai Industrial and Seah Steel go up and down completely randomly.
Pair Corralation between Hyundai Industrial and Seah Steel
Assuming the 90 days trading horizon Hyundai Industrial Co is expected to under-perform the Seah Steel. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Industrial Co is 1.21 times less risky than Seah Steel. The stock trades about -0.09 of its potential returns per unit of risk. The Seah Steel Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 21,400,000 in Seah Steel Corp on August 27, 2024 and sell it today you would lose (3,920,000) from holding Seah Steel Corp or give up 18.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Industrial Co vs. Seah Steel Corp
Performance |
| Timeline |
| Hyundai Industrial |
| Seah Steel Corp |
Hyundai Industrial and Seah Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Industrial and Seah Steel
The main advantage of trading using opposite Hyundai Industrial and Seah Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Industrial position performs unexpectedly, Seah Steel 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 Seah Steel will offset losses from the drop in Seah Steel's long position.| Hyundai Industrial vs. iNtRON Biotechnology | Hyundai Industrial vs. Clean Science co | Hyundai Industrial vs. Daewoo Engineering Construction | Hyundai Industrial vs. Neungyule Education |
| Seah Steel vs. LAKE MATERIALS LTD | Seah Steel vs. Daejoo Electronic Materials | Seah Steel vs. Daiyang Metal Co | Seah Steel vs. Hyundai Industrial 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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