Correlation Between SK Bioscience and Hyundai
Can any of the company-specific risk be diversified away by investing in both SK Bioscience and Hyundai 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 SK Bioscience and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Bioscience Co and Hyundai Motor, you can compare the effects of market volatilities on SK Bioscience and Hyundai 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 SK Bioscience with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Bioscience and Hyundai.
Diversification Opportunities for SK Bioscience and Hyundai
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 302440 and Hyundai is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SK Bioscience Co and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and SK Bioscience 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 SK Bioscience Co are associated (or correlated) with Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of SK Bioscience i.e., SK Bioscience and Hyundai go up and down completely randomly.
Pair Corralation between SK Bioscience and Hyundai
Assuming the 90 days trading horizon SK Bioscience Co is expected to under-perform the Hyundai. In addition to that, SK Bioscience is 1.33 times more volatile than Hyundai Motor. It trades about -0.2 of its total potential returns per unit of risk. Hyundai Motor is currently generating about 0.04 per unit of volatility. If you would invest 21,500,000 in Hyundai Motor on September 1, 2024 and sell it today you would earn a total of 350,000 from holding Hyundai Motor or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SK Bioscience Co vs. Hyundai Motor
Performance |
| Timeline |
| SK Bioscience |
| Hyundai Motor |
SK Bioscience and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Bioscience and Hyundai
The main advantage of trading using opposite SK Bioscience and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Bioscience position performs unexpectedly, Hyundai 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 will offset losses from the drop in Hyundai's long position.| SK Bioscience vs. SCI Information Service | SK Bioscience vs. Ni Steel | SK Bioscience vs. Jeil Steel Mfg | SK Bioscience vs. Dong A Steel Technology |
| Hyundai vs. LG Display | Hyundai vs. Hyundai Motor Co | Hyundai vs. Hyundai Motor Co | Hyundai vs. Adaptive Plasma Technology |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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