Correlation Between Hyundai and Aju IB
Can any of the company-specific risk be diversified away by investing in both Hyundai and Aju IB 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 Aju IB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor Co and Aju IB Investment, you can compare the effects of market volatilities on Hyundai and Aju IB 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 Aju IB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Aju IB.
Diversification Opportunities for Hyundai and Aju IB
Excellent diversification
The 3 months correlation between Hyundai and Aju is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Aju IB Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aju IB Investment 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 Co are associated (or correlated) with Aju IB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aju IB Investment has no effect on the direction of Hyundai i.e., Hyundai and Aju IB go up and down completely randomly.
Pair Corralation between Hyundai and Aju IB
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.57 times more return on investment than Aju IB. However, Hyundai Motor Co is 1.76 times less risky than Aju IB. It trades about 0.11 of its potential returns per unit of risk. Aju IB Investment is currently generating about 0.02 per unit of risk. If you would invest 6,472,415 in Hyundai Motor Co on September 3, 2024 and sell it today you would earn a total of 9,227,585 from holding Hyundai Motor Co or generate 142.57% 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 Co vs. Aju IB Investment
Performance |
| Timeline |
| Hyundai Motor |
| Aju IB Investment |
Hyundai and Aju IB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Aju IB
The main advantage of trading using opposite Hyundai and Aju IB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Aju IB 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 Aju IB will offset losses from the drop in Aju IB's long position.| Hyundai vs. NewFlex Technology Co | Hyundai vs. KG Eco Technology | Hyundai vs. Solution Advanced Technology | Hyundai vs. iNtRON Biotechnology |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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