Correlation Between Hyundai Green and Ssangyong Information

Can any of the company-specific risk be diversified away by investing in both Hyundai Green and Ssangyong 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 Ssangyong 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 Ssangyong Information Communication, you can compare the effects of market volatilities on Hyundai Green and Ssangyong 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 Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Green and Ssangyong Information.

Diversification Opportunities for Hyundai Green and Ssangyong Information

0.68

Correlation Coefficient

Hyundai Green  Ssangyong Information

Poor diversification

The 3 months correlation between Hyundai and Ssangyong is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Green Food and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information 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 Ssangyong Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Information has no effect on the direction of Hyundai Green i.e., Hyundai Green and Ssangyong Information go up and down completely randomly.

Pair Corralation between Hyundai Green and Ssangyong Information

Assuming the 90 days trading horizon Hyundai Green Food is expected to under-perform the Ssangyong Information. In addition to that, Hyundai Green is 1.94 times more volatile than Ssangyong Information Communication. It trades about -0.33 of its total potential returns per unit of risk. Ssangyong Information Communication is currently generating about 0.01 per unit of volatility. If you would invest  64,300  in Ssangyong Information Communication on October 23, 2024 and sell it today you would earn a total of  100.00  from holding Ssangyong Information Communication or generate 0.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Hyundai Green Food  vs.  Ssangyong Information Communic

Hyundai Green Food

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hyundai Green Food are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hyundai Green sustained solid returns over the last few months and may actually be approaching a breakup point.

Ssangyong Information

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ssangyong Information Communication are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ssangyong Information may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Hyundai Green and Ssangyong Information

The main advantage of trading using opposite Hyundai Green and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Green position performs unexpectedly, Ssangyong 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 Ssangyong Information will offset losses from the drop in Ssangyong Information's long position.

The idea behind Hyundai Green Food and Ssangyong Information Communication pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.