Correlation Between Hyundai and Daol Investment
Can any of the company-specific risk be diversified away by investing in both Hyundai and Daol Investment 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 Daol Investment 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 Daol Investment Securities, you can compare the effects of market volatilities on Hyundai and Daol Investment 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 Daol Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Daol Investment.
Diversification Opportunities for Hyundai and Daol Investment
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Daol is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Daol Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daol Investment Secu 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 Daol Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daol Investment Secu has no effect on the direction of Hyundai i.e., Hyundai and Daol Investment go up and down completely randomly.
Pair Corralation between Hyundai and Daol Investment
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.97 times more return on investment than Daol Investment. However, Hyundai Motor Co is 1.03 times less risky than Daol Investment. It trades about -0.01 of its potential returns per unit of risk. Daol Investment Securities is currently generating about -0.15 per unit of risk. If you would invest 15,960,000 in Hyundai Motor Co on August 31, 2024 and sell it today you would lose (110,000) from holding Hyundai Motor Co or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Daol Investment Securities
Performance |
| Timeline |
| Hyundai Motor |
| Daol Investment Secu |
Hyundai and Daol Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Daol Investment
The main advantage of trading using opposite Hyundai and Daol Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Daol Investment 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 Daol Investment will offset losses from the drop in Daol Investment's long position.| Hyundai vs. Hyundai Motor Co | Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind | Hyundai vs. Mirae Asset Daewoo |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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