Correlation Between SIMMTECH and Hyundai Elevator
Can any of the company-specific risk be diversified away by investing in both SIMMTECH and Hyundai Elevator 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 SIMMTECH and Hyundai Elevator into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMMTECH Co and Hyundai Elevator, you can compare the effects of market volatilities on SIMMTECH and Hyundai Elevator 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 SIMMTECH with a short position of Hyundai Elevator. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMMTECH and Hyundai Elevator.
Diversification Opportunities for SIMMTECH and Hyundai Elevator
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SIMMTECH and Hyundai is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding SIMMTECH Co and Hyundai Elevator in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Elevator and SIMMTECH 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 SIMMTECH Co are associated (or correlated) with Hyundai Elevator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Elevator has no effect on the direction of SIMMTECH i.e., SIMMTECH and Hyundai Elevator go up and down completely randomly.
Pair Corralation between SIMMTECH and Hyundai Elevator
Assuming the 90 days trading horizon SIMMTECH Co is expected to under-perform the Hyundai Elevator. In addition to that, SIMMTECH is 1.09 times more volatile than Hyundai Elevator. It trades about -0.5 of its total potential returns per unit of risk. Hyundai Elevator is currently generating about 0.21 per unit of volatility. If you would invest 4,670,000 in Hyundai Elevator on August 30, 2024 and sell it today you would earn a total of 620,000 from holding Hyundai Elevator or generate 13.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIMMTECH Co vs. Hyundai Elevator
Performance |
| Timeline |
| SIMMTECH |
| Hyundai Elevator |
SIMMTECH and Hyundai Elevator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMMTECH and Hyundai Elevator
The main advantage of trading using opposite SIMMTECH and Hyundai Elevator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMMTECH position performs unexpectedly, Hyundai Elevator 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 Elevator will offset losses from the drop in Hyundai Elevator's long position.| SIMMTECH vs. Ni Steel | SIMMTECH vs. Jeil Steel Mfg | SIMMTECH vs. Hannong Chemicals | SIMMTECH vs. Chorokbaem Healthcare Co |
| Hyundai Elevator vs. Namhae Chemical | Hyundai Elevator vs. Hanjoo Light Metal | Hyundai Elevator vs. LG Chemicals | Hyundai Elevator vs. Youngbo Chemical 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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