Correlation Between Hyundai Heavy and SKONEC Entertainment
Can any of the company-specific risk be diversified away by investing in both Hyundai Heavy and SKONEC Entertainment 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 SKONEC Entertainment 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 SKONEC Entertainment Co, you can compare the effects of market volatilities on Hyundai Heavy and SKONEC Entertainment 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 SKONEC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Heavy and SKONEC Entertainment.
Diversification Opportunities for Hyundai Heavy and SKONEC Entertainment
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and SKONEC is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Heavy Industries and SKONEC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKONEC Entertainment 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 SKONEC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKONEC Entertainment has no effect on the direction of Hyundai Heavy i.e., Hyundai Heavy and SKONEC Entertainment go up and down completely randomly.
Pair Corralation between Hyundai Heavy and SKONEC Entertainment
Assuming the 90 days trading horizon Hyundai Heavy Industries is expected to generate 0.8 times more return on investment than SKONEC Entertainment. However, Hyundai Heavy Industries is 1.25 times less risky than SKONEC Entertainment. It trades about 0.1 of its potential returns per unit of risk. SKONEC Entertainment Co is currently generating about -0.08 per unit of risk. If you would invest 12,500,000 in Hyundai Heavy Industries on August 24, 2024 and sell it today you would earn a total of 10,350,000 from holding Hyundai Heavy Industries or generate 82.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Heavy Industries vs. SKONEC Entertainment Co
Performance |
| Timeline |
| Hyundai Heavy Industries |
| SKONEC Entertainment |
Hyundai Heavy and SKONEC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Heavy and SKONEC Entertainment
The main advantage of trading using opposite Hyundai Heavy and SKONEC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Heavy position performs unexpectedly, SKONEC Entertainment 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 SKONEC Entertainment will offset losses from the drop in SKONEC Entertainment's long position.| Hyundai Heavy vs. HJ ShipBuilding Construction | Hyundai Heavy vs. Busan Industrial Co | Hyundai Heavy vs. Busan Ind | Hyundai Heavy vs. Mirae Asset Daewoo |
| SKONEC Entertainment vs. Posco ICT | SKONEC Entertainment vs. Devsisters corporation | SKONEC Entertainment vs. Konan Technology | SKONEC Entertainment vs. Alchera |
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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