Correlation Between Hyundai and Hyundai

Can any of the company-specific risk be diversified away by investing in both Hyundai 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 Hyundai and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hyundai Motor Co and Hyundai Motor Co, you can compare the effects of market volatilities on Hyundai 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 Hyundai with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Hyundai.

Diversification Opportunities for Hyundai and Hyundai

0.99

Correlation Coefficient

Hyundai  Hyundai

No risk reduction

The 3 months correlation between Hyundai and Hyundai is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Hyundai 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 Motor 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 Hyundai i.e., Hyundai and Hyundai go up and down completely randomly.

Pair Corralation between Hyundai and Hyundai

Assuming the 90 days trading horizon Hyundai Motor Co is expected to under-perform the Hyundai. In addition to that, Hyundai is 1.07 times more volatile than Hyundai Motor Co. It trades about -0.05 of its total potential returns per unit of risk. Hyundai Motor Co is currently generating about -0.04 per unit of volatility. If you would invest  16,600,000  in Hyundai Motor Co on January 31, 2024 and sell it today you would lose (760,000) from holding Hyundai Motor Co or give up 4.58% of portfolio value over 90 days.

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

Hyundai Motor Co  vs.  Hyundai Motor Co

Hyundai Motor

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hyundai Motor Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hyundai sustained solid returns over the last few months and may actually be approaching a breakup point.

Hyundai Motor

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hyundai Motor Co are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hyundai sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hyundai and Hyundai

The main advantage of trading using opposite Hyundai and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai 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.

The idea behind Hyundai Motor Co and Hyundai Motor Co 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.