Correlation Between SIMMTECH and Hyosung Advanced
Can any of the company-specific risk be diversified away by investing in both SIMMTECH and Hyosung Advanced 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 Hyosung Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMMTECH Co and Hyosung Advanced Materials, you can compare the effects of market volatilities on SIMMTECH and Hyosung Advanced 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 Hyosung Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMMTECH and Hyosung Advanced.
Diversification Opportunities for SIMMTECH and Hyosung Advanced
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SIMMTECH and Hyosung is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SIMMTECH Co and Hyosung Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Advanced Mat 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 Hyosung Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Advanced Mat has no effect on the direction of SIMMTECH i.e., SIMMTECH and Hyosung Advanced go up and down completely randomly.
Pair Corralation between SIMMTECH and Hyosung Advanced
Assuming the 90 days trading horizon SIMMTECH Co is expected to generate 0.92 times more return on investment than Hyosung Advanced. However, SIMMTECH Co is 1.09 times less risky than Hyosung Advanced. It trades about -0.48 of its potential returns per unit of risk. Hyosung Advanced Materials is currently generating about -0.62 per unit of risk. If you would invest 1,634,000 in SIMMTECH Co on August 28, 2024 and sell it today you would lose (446,000) from holding SIMMTECH Co or give up 27.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIMMTECH Co vs. Hyosung Advanced Materials
Performance |
| Timeline |
| SIMMTECH |
| Hyosung Advanced Mat |
SIMMTECH and Hyosung Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMMTECH and Hyosung Advanced
The main advantage of trading using opposite SIMMTECH and Hyosung Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMMTECH position performs unexpectedly, Hyosung Advanced 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 Hyosung Advanced will offset losses from the drop in Hyosung Advanced's long position.| SIMMTECH vs. Shinil Electronics Co | SIMMTECH vs. Seoul Electronics Telecom | SIMMTECH vs. ABCO Electronics Co | SIMMTECH vs. Daekyung Machinery Engineering |
| Hyosung Advanced vs. Yura Tech Co | Hyosung Advanced vs. Visang Education | Hyosung Advanced vs. Amogreentech Co | Hyosung Advanced vs. CJ Seafood Corp |
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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