Correlation Between Dongbang Transport and Hyundai
Can any of the company-specific risk be diversified away by investing in both Dongbang Transport 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 Dongbang Transport and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbang Transport Logistics and Hyundai Motor Co, you can compare the effects of market volatilities on Dongbang Transport 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 Dongbang Transport with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Transport and Hyundai.
Diversification Opportunities for Dongbang Transport and Hyundai
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongbang and Hyundai is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Transport Logistics and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Dongbang Transport 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 Dongbang Transport Logistics 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 Dongbang Transport i.e., Dongbang Transport and Hyundai go up and down completely randomly.
Pair Corralation between Dongbang Transport and Hyundai
Assuming the 90 days trading horizon Dongbang Transport Logistics is expected to under-perform the Hyundai. In addition to that, Dongbang Transport is 1.14 times more volatile than Hyundai Motor Co. It trades about -0.12 of its total potential returns per unit of risk. Hyundai Motor Co is currently generating about 0.2 per unit of volatility. If you would invest 15,420,000 in Hyundai Motor Co on November 4, 2024 and sell it today you would earn a total of 680,000 from holding Hyundai Motor Co or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Transport Logistics vs. Hyundai Motor Co
Performance |
| Timeline |
| Dongbang Transport |
| Hyundai Motor |
Dongbang Transport and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Transport and Hyundai
The main advantage of trading using opposite Dongbang Transport and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Transport 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.| Dongbang Transport vs. Daiyang Metal Co | Dongbang Transport vs. BGF Retail Co | Dongbang Transport vs. Hanwha Chemical Corp | Dongbang Transport vs. Kg Chemical |
| Hyundai vs. Korea Electronic Certification | Hyundai vs. Hankook Furniture Co | Hyundai vs. Lotte Non Life Insurance | Hyundai vs. PJ Electronics Co |
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.
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