Correlation Between Hyundai and DAEA TI
Can any of the company-specific risk be diversified away by investing in both Hyundai and DAEA TI 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 DAEA TI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and DAEA TI Co, you can compare the effects of market volatilities on Hyundai and DAEA TI 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 DAEA TI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and DAEA TI.
Diversification Opportunities for Hyundai and DAEA TI
Very good diversification
The 3 months correlation between Hyundai and DAEA is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and DAEA TI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEA TI 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 are associated (or correlated) with DAEA TI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEA TI has no effect on the direction of Hyundai i.e., Hyundai and DAEA TI go up and down completely randomly.
Pair Corralation between Hyundai and DAEA TI
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 0.93 times more return on investment than DAEA TI. However, Hyundai Motor is 1.08 times less risky than DAEA TI. It trades about 0.05 of its potential returns per unit of risk. DAEA TI Co is currently generating about 0.0 per unit of risk. If you would invest 14,028,100 in Hyundai Motor on September 13, 2024 and sell it today you would earn a total of 7,121,900 from holding Hyundai Motor or generate 50.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. DAEA TI Co
Performance |
| Timeline |
| Hyundai Motor |
| DAEA TI |
Hyundai and DAEA TI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and DAEA TI
The main advantage of trading using opposite Hyundai and DAEA TI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, DAEA TI 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 DAEA TI will offset losses from the drop in DAEA TI's long position.| Hyundai vs. Daou Data Corp | Hyundai vs. Solution Advanced Technology | Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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