Correlation Between Hyundai and Atec
Can any of the company-specific risk be diversified away by investing in both Hyundai and Atec 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 Atec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Atec Co, you can compare the effects of market volatilities on Hyundai and Atec 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 Atec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Atec.
Diversification Opportunities for Hyundai and Atec
Very good diversification
The 3 months correlation between Hyundai and Atec is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Atec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atec 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 Atec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atec has no effect on the direction of Hyundai i.e., Hyundai and Atec go up and down completely randomly.
Pair Corralation between Hyundai and Atec
Assuming the 90 days trading horizon Hyundai is expected to generate 6.49 times less return on investment than Atec. But when comparing it to its historical volatility, Hyundai Motor is 2.43 times less risky than Atec. It trades about 0.03 of its potential returns per unit of risk. Atec Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 840,831 in Atec Co on December 4, 2024 and sell it today you would earn a total of 2,284,169 from holding Atec Co or generate 271.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Hyundai Motor vs. Atec Co
Performance |
| Timeline |
| Hyundai Motor |
| Atec |
Hyundai and Atec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Atec
The main advantage of trading using opposite Hyundai and Atec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Atec 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 Atec will offset losses from the drop in Atec's long position.| Hyundai vs. Lotte Data Communication | Hyundai vs. Eugene Investment Securities | Hyundai vs. Polaris Office Corp | Hyundai vs. Infinitt Healthcare Co |
| Atec vs. SEOJEON ELECTRIC MACHINERY | Atec vs. Keyang Electric Machinery | Atec vs. Hwacheon Machinery Co | Atec vs. Sam Yang Foods |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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