Correlation Between Hyundai and HYBE Co
Can any of the company-specific risk be diversified away by investing in both Hyundai and HYBE Co 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 HYBE Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and HYBE Co, you can compare the effects of market volatilities on Hyundai and HYBE Co 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 HYBE Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and HYBE Co.
Diversification Opportunities for Hyundai and HYBE Co
Excellent diversification
The 3 months correlation between Hyundai and HYBE is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and HYBE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYBE Co 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 HYBE Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYBE Co has no effect on the direction of Hyundai i.e., Hyundai and HYBE Co go up and down completely randomly.
Pair Corralation between Hyundai and HYBE Co
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 0.85 times more return on investment than HYBE Co. However, Hyundai Motor is 1.18 times less risky than HYBE Co. It trades about 0.04 of its potential returns per unit of risk. HYBE Co is currently generating about -0.01 per unit of risk. If you would invest 17,411,400 in Hyundai Motor on September 12, 2024 and sell it today you would earn a total of 3,638,600 from holding Hyundai Motor or generate 20.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. HYBE Co
Performance |
| Timeline |
| Hyundai Motor |
| HYBE Co |
Hyundai and HYBE Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and HYBE Co
The main advantage of trading using opposite Hyundai and HYBE Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, HYBE Co 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 HYBE Co will offset losses from the drop in HYBE Co's long position.| Hyundai vs. PlayD Co | Hyundai vs. Wonil Special Steel | Hyundai vs. Grand Korea Leisure | Hyundai vs. Alton Sports CoLtd |
| HYBE Co vs. V One Tech Co | HYBE Co vs. RFTech Co | HYBE Co vs. Dongbang Ship Machinery | HYBE Co vs. Lion Chemtech Co |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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