Correlation Between Hyundai and CJ Cheiljedang
Can any of the company-specific risk be diversified away by investing in both Hyundai and CJ Cheiljedang 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 CJ Cheiljedang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and CJ Cheiljedang, you can compare the effects of market volatilities on Hyundai and CJ Cheiljedang 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 CJ Cheiljedang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and CJ Cheiljedang.
Diversification Opportunities for Hyundai and CJ Cheiljedang
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and 097950 is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and CJ Cheiljedang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CJ Cheiljedang 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 CJ Cheiljedang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CJ Cheiljedang has no effect on the direction of Hyundai i.e., Hyundai and CJ Cheiljedang go up and down completely randomly.
Pair Corralation between Hyundai and CJ Cheiljedang
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the CJ Cheiljedang. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Motor is 1.14 times less risky than CJ Cheiljedang. The stock trades about 0.0 of its potential returns per unit of risk. The CJ Cheiljedang is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 27,200,000 in CJ Cheiljedang on August 31, 2024 and sell it today you would earn a total of 100,000 from holding CJ Cheiljedang or generate 0.37% 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. CJ Cheiljedang
Performance |
| Timeline |
| Hyundai Motor |
| CJ Cheiljedang |
Hyundai and CJ Cheiljedang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and CJ Cheiljedang
The main advantage of trading using opposite Hyundai and CJ Cheiljedang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, CJ Cheiljedang 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 CJ Cheiljedang will offset losses from the drop in CJ Cheiljedang's long position.| Hyundai vs. LG Display | Hyundai vs. Hyundai Motor Co | Hyundai vs. Hyundai Motor Co | Hyundai vs. Adaptive Plasma Technology |
| CJ Cheiljedang vs. Taeyang Metal Industrial | CJ Cheiljedang vs. Heungkuk Metaltech CoLtd | CJ Cheiljedang vs. Dongwon Metal Co | CJ Cheiljedang vs. Handok Clean Tech |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges |