Correlation Between Hyundai Heavy and Settlebank
Can any of the company-specific risk be diversified away by investing in both Hyundai Heavy and Settlebank 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 Heavy and Settlebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Heavy Industries and Settlebank, you can compare the effects of market volatilities on Hyundai Heavy and Settlebank 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 Heavy with a short position of Settlebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Heavy and Settlebank.
Diversification Opportunities for Hyundai Heavy and Settlebank
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hyundai and Settlebank is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Heavy Industries and Settlebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Settlebank and Hyundai Heavy 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 Heavy Industries are associated (or correlated) with Settlebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Settlebank has no effect on the direction of Hyundai Heavy i.e., Hyundai Heavy and Settlebank go up and down completely randomly.
Pair Corralation between Hyundai Heavy and Settlebank
Assuming the 90 days trading horizon Hyundai Heavy Industries is expected to under-perform the Settlebank. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Heavy Industries is 1.41 times less risky than Settlebank. The stock trades about -0.02 of its potential returns per unit of risk. The Settlebank is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,581,000 in Settlebank on August 28, 2024 and sell it today you would lose (16,000) from holding Settlebank or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Heavy Industries vs. Settlebank
Performance |
| Timeline |
| Hyundai Heavy Industries |
| Settlebank |
Hyundai Heavy and Settlebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Heavy and Settlebank
The main advantage of trading using opposite Hyundai Heavy and Settlebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Heavy position performs unexpectedly, Settlebank 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 Settlebank will offset losses from the drop in Settlebank's long position.| Hyundai Heavy vs. Samsung Electronics Co | Hyundai Heavy vs. Samsung Electronics Co | Hyundai Heavy vs. Hyundai Motor Co | Hyundai Heavy vs. Hyundai Motor |
| Settlebank vs. Busan Industrial Co | Settlebank vs. Busan Ind | Settlebank vs. Mirae Asset Daewoo | Settlebank vs. UNISEM 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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