Correlation Between Hyundai and Total Soft
Can any of the company-specific risk be diversified away by investing in both Hyundai and Total Soft 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 Total Soft 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 Total Soft Bank, you can compare the effects of market volatilities on Hyundai and Total Soft 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 Total Soft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Total Soft.
Diversification Opportunities for Hyundai and Total Soft
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and Total is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Total Soft Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Soft Bank 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 Total Soft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Soft Bank has no effect on the direction of Hyundai i.e., Hyundai and Total Soft go up and down completely randomly.
Pair Corralation between Hyundai and Total Soft
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.59 times more return on investment than Total Soft. However, Hyundai Motor Co is 1.7 times less risky than Total Soft. It trades about 0.11 of its potential returns per unit of risk. Total Soft Bank is currently generating about 0.02 per unit of risk. If you would invest 6,521,635 in Hyundai Motor Co on August 29, 2024 and sell it today you would earn a total of 9,668,365 from holding Hyundai Motor Co or generate 148.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Total Soft Bank
Performance |
| Timeline |
| Hyundai Motor |
| Total Soft Bank |
Hyundai and Total Soft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Total Soft
The main advantage of trading using opposite Hyundai and Total Soft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Total Soft 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 Total Soft will offset losses from the drop in Total Soft's long position.| Hyundai vs. Mobileleader CoLtd | Hyundai vs. Automobile Pc | Hyundai vs. System and Application | Hyundai vs. Lotte Data Communication |
| Total Soft vs. Busan Industrial Co | Total Soft vs. Busan Ind | Total Soft vs. Shinhan WTI Futures | Total Soft vs. Finebesteel |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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