Correlation Between Hyundai and Vissem Electronics
Can any of the company-specific risk be diversified away by investing in both Hyundai and Vissem Electronics 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 Vissem Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Vissem Electronics Co, you can compare the effects of market volatilities on Hyundai and Vissem Electronics 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 Vissem Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Vissem Electronics.
Diversification Opportunities for Hyundai and Vissem Electronics
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Vissem is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Vissem Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vissem Electronics 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 Vissem Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vissem Electronics has no effect on the direction of Hyundai i.e., Hyundai and Vissem Electronics go up and down completely randomly.
Pair Corralation between Hyundai and Vissem Electronics
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 0.72 times more return on investment than Vissem Electronics. However, Hyundai Motor is 1.39 times less risky than Vissem Electronics. It trades about 0.05 of its potential returns per unit of risk. Vissem Electronics Co is currently generating about 0.0 per unit of risk. If you would invest 14,117,400 in Hyundai Motor on September 14, 2024 and sell it today you would earn a total of 7,032,600 from holding Hyundai Motor or generate 49.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Vissem Electronics Co
Performance |
| Timeline |
| Hyundai Motor |
| Vissem Electronics |
Hyundai and Vissem Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Vissem Electronics
The main advantage of trading using opposite Hyundai and Vissem Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Vissem Electronics 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 Vissem Electronics will offset losses from the drop in Vissem Electronics' long position.| Hyundai vs. Daou Data Corp | Hyundai vs. Solution Advanced Technology | Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind |
| Vissem Electronics vs. Cube Entertainment | Vissem Electronics vs. Dreamus Company | Vissem Electronics vs. LG Energy Solution | Vissem Electronics 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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