Correlation Between Hyundai Heavy and Shinhan Inverse
Can any of the company-specific risk be diversified away by investing in both Hyundai Heavy and Shinhan Inverse 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 Shinhan Inverse 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 Shinhan Inverse WTI, you can compare the effects of market volatilities on Hyundai Heavy and Shinhan Inverse 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 Shinhan Inverse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Heavy and Shinhan Inverse.
Diversification Opportunities for Hyundai Heavy and Shinhan Inverse
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyundai and Shinhan is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Heavy Industries and Shinhan Inverse WTI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinhan Inverse WTI 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 Shinhan Inverse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinhan Inverse WTI has no effect on the direction of Hyundai Heavy i.e., Hyundai Heavy and Shinhan Inverse go up and down completely randomly.
Pair Corralation between Hyundai Heavy and Shinhan Inverse
Assuming the 90 days trading horizon Hyundai Heavy Industries is expected to under-perform the Shinhan Inverse. In addition to that, Hyundai Heavy is 1.27 times more volatile than Shinhan Inverse WTI. It trades about -0.05 of its total potential returns per unit of risk. Shinhan Inverse WTI is currently generating about -0.01 per unit of volatility. If you would invest 280,500 in Shinhan Inverse WTI on September 1, 2024 and sell it today you would lose (2,000) from holding Shinhan Inverse WTI or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Heavy Industries vs. Shinhan Inverse WTI
Performance |
| Timeline |
| Hyundai Heavy Industries |
| Shinhan Inverse WTI |
Hyundai Heavy and Shinhan Inverse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Heavy and Shinhan Inverse
The main advantage of trading using opposite Hyundai Heavy and Shinhan Inverse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Heavy position performs unexpectedly, Shinhan Inverse 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 Shinhan Inverse will offset losses from the drop in Shinhan Inverse's long position.| Hyundai Heavy vs. Union Materials Corp | Hyundai Heavy vs. Daejoo Electronic Materials | Hyundai Heavy vs. Ecoplastic | Hyundai Heavy vs. Netmarble Games Corp |
| Shinhan Inverse vs. AptaBio Therapeutics | Shinhan Inverse vs. Daewoo SBI SPAC | Shinhan Inverse vs. Dream Security co | Shinhan Inverse vs. Microfriend |
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 Stocks Directory module to find actively traded stocks across global markets.
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