Correlation Between Hyundai and SOLiD
Can any of the company-specific risk be diversified away by investing in both Hyundai and SOLiD 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 SOLiD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and SOLiD Inc, you can compare the effects of market volatilities on Hyundai and SOLiD 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 SOLiD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and SOLiD.
Diversification Opportunities for Hyundai and SOLiD
Very good diversification
The 3 months correlation between Hyundai and SOLiD is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and SOLiD Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLiD Inc 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 SOLiD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLiD Inc has no effect on the direction of Hyundai i.e., Hyundai and SOLiD go up and down completely randomly.
Pair Corralation between Hyundai and SOLiD
Assuming the 90 days trading horizon Hyundai is expected to generate 3.64 times less return on investment than SOLiD. But when comparing it to its historical volatility, Hyundai Motor is 1.56 times less risky than SOLiD. It trades about 0.05 of its potential returns per unit of risk. SOLiD Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 490,000 in SOLiD Inc on September 13, 2024 and sell it today you would earn a total of 43,000 from holding SOLiD Inc or generate 8.78% 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. SOLiD Inc
Performance |
| Timeline |
| Hyundai Motor |
| SOLiD Inc |
Hyundai and SOLiD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and SOLiD
The main advantage of trading using opposite Hyundai and SOLiD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, SOLiD 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 SOLiD will offset losses from the drop in SOLiD's long position.| Hyundai vs. Daou Data Corp | Hyundai vs. Solution Advanced Technology | Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind |
| SOLiD vs. Cube Entertainment | SOLiD vs. Dreamus Company | SOLiD vs. LG Energy Solution | SOLiD vs. Dongwon System |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |