Correlation Between Hyundai Heavy and SK IE
Can any of the company-specific risk be diversified away by investing in both Hyundai Heavy and SK IE 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 SK IE 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 SK IE Technology, you can compare the effects of market volatilities on Hyundai Heavy and SK IE 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 SK IE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Heavy and SK IE.
Diversification Opportunities for Hyundai Heavy and SK IE
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hyundai and 361610 is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Heavy Industries and SK IE Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK IE Technology 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 SK IE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK IE Technology has no effect on the direction of Hyundai Heavy i.e., Hyundai Heavy and SK IE go up and down completely randomly.
Pair Corralation between Hyundai Heavy and SK IE
Assuming the 90 days trading horizon Hyundai Heavy Industries is expected to generate 1.02 times more return on investment than SK IE. However, Hyundai Heavy is 1.02 times more volatile than SK IE Technology. It trades about 0.09 of its potential returns per unit of risk. SK IE Technology is currently generating about -0.15 per unit of risk. If you would invest 12,170,000 in Hyundai Heavy Industries on September 4, 2024 and sell it today you would earn a total of 8,930,000 from holding Hyundai Heavy Industries or generate 73.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Heavy Industries vs. SK IE Technology
Performance |
| Timeline |
| Hyundai Heavy Industries |
| SK IE Technology |
Hyundai Heavy and SK IE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Heavy and SK IE
The main advantage of trading using opposite Hyundai Heavy and SK IE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Heavy position performs unexpectedly, SK IE 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 SK IE will offset losses from the drop in SK IE's long position.| Hyundai Heavy vs. Amogreentech Co | Hyundai Heavy vs. Hwangkum Steel Technology | Hyundai Heavy vs. Innowireless Co | Hyundai Heavy vs. Lion Chemtech Co |
| SK IE vs. Keyang Electric Machinery | SK IE vs. Nam Hwa Construction | SK IE vs. SEOJEON ELECTRIC MACHINERY | SK IE vs. Hyundai Green Food |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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