Correlation Between Hyundai Green and SCI Information
Can any of the company-specific risk be diversified away by investing in both Hyundai Green and SCI Information 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 Green and SCI Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Green Food and SCI Information Service, you can compare the effects of market volatilities on Hyundai Green and SCI Information 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 Green with a short position of SCI Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Green and SCI Information.
Diversification Opportunities for Hyundai Green and SCI Information
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and SCI is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Green Food and SCI Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Information Service and Hyundai Green 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 Green Food are associated (or correlated) with SCI Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Information Service has no effect on the direction of Hyundai Green i.e., Hyundai Green and SCI Information go up and down completely randomly.
Pair Corralation between Hyundai Green and SCI Information
Assuming the 90 days trading horizon Hyundai Green Food is expected to generate 0.55 times more return on investment than SCI Information. However, Hyundai Green Food is 1.82 times less risky than SCI Information. It trades about 0.1 of its potential returns per unit of risk. SCI Information Service is currently generating about -0.06 per unit of risk. If you would invest 1,136,000 in Hyundai Green Food on September 25, 2024 and sell it today you would earn a total of 422,000 from holding Hyundai Green Food or generate 37.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hyundai Green Food vs. SCI Information Service
Performance |
Timeline |
Hyundai Green Food |
SCI Information Service |
Hyundai Green and SCI Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hyundai Green and SCI Information
The main advantage of trading using opposite Hyundai Green and SCI Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Green position performs unexpectedly, SCI Information 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 SCI Information will offset losses from the drop in SCI Information's long position.Hyundai Green vs. Samsung Electronics Co | Hyundai Green vs. Samsung Electronics Co | Hyundai Green vs. LG Energy Solution | Hyundai Green vs. SK Hynix |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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