Correlation Between Hyundai Heavy and SSR
Can any of the company-specific risk be diversified away by investing in both Hyundai Heavy and SSR 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 SSR 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 SSR Inc, you can compare the effects of market volatilities on Hyundai Heavy and SSR 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 SSR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Heavy and SSR.
Diversification Opportunities for Hyundai Heavy and SSR
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hyundai and SSR is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Heavy Industries and SSR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSR Inc 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 SSR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSR Inc has no effect on the direction of Hyundai Heavy i.e., Hyundai Heavy and SSR go up and down completely randomly.
Pair Corralation between Hyundai Heavy and SSR
Assuming the 90 days trading horizon Hyundai Heavy Industries is expected to under-perform the SSR. In addition to that, Hyundai Heavy is 2.17 times more volatile than SSR Inc. It trades about -0.02 of its total potential returns per unit of risk. SSR Inc is currently generating about 0.24 per unit of volatility. If you would invest 327,000 in SSR Inc on August 28, 2024 and sell it today you would earn a total of 16,000 from holding SSR Inc or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Heavy Industries vs. SSR Inc
Performance |
| Timeline |
| Hyundai Heavy Industries |
| SSR Inc |
Hyundai Heavy and SSR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Heavy and SSR
The main advantage of trading using opposite Hyundai Heavy and SSR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Heavy position performs unexpectedly, SSR 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 SSR will offset losses from the drop in SSR'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 |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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