Correlation Between Hyundai and Carriesoft
Can any of the company-specific risk be diversified away by investing in both Hyundai and Carriesoft 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 Carriesoft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Carriesoft Co, you can compare the effects of market volatilities on Hyundai and Carriesoft 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 Carriesoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Carriesoft.
Diversification Opportunities for Hyundai and Carriesoft
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Carriesoft is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Carriesoft Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carriesoft 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 Carriesoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carriesoft has no effect on the direction of Hyundai i.e., Hyundai and Carriesoft go up and down completely randomly.
Pair Corralation between Hyundai and Carriesoft
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 0.49 times more return on investment than Carriesoft. However, Hyundai Motor is 2.04 times less risky than Carriesoft. It trades about 0.05 of its potential returns per unit of risk. Carriesoft Co is currently generating about -0.01 per unit of risk. If you would invest 14,787,600 in Hyundai Motor on August 24, 2024 and sell it today you would earn a total of 6,762,400 from holding Hyundai Motor or generate 45.73% 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. Carriesoft Co
Performance |
| Timeline |
| Hyundai Motor |
| Carriesoft |
Hyundai and Carriesoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Carriesoft
The main advantage of trading using opposite Hyundai and Carriesoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Carriesoft 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 Carriesoft will offset losses from the drop in Carriesoft's long position.| Hyundai vs. Lotte Chilsung Beverage | Hyundai vs. DSC Investment | Hyundai vs. EBEST Investment Securities | Hyundai vs. Dongil Metal Co |
| Carriesoft vs. Hankuk Steel Wire | Carriesoft vs. Dongil Steel Co | Carriesoft vs. Innowireless Co | Carriesoft vs. Wonil Special Steel |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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