Correlation Between Hyundai and APS Holdings
Can any of the company-specific risk be diversified away by investing in both Hyundai and APS Holdings 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 APS Holdings 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 APS Holdings, you can compare the effects of market volatilities on Hyundai and APS Holdings 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 APS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and APS Holdings.
Diversification Opportunities for Hyundai and APS Holdings
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and APS is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and APS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APS Holdings 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 APS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APS Holdings has no effect on the direction of Hyundai i.e., Hyundai and APS Holdings go up and down completely randomly.
Pair Corralation between Hyundai and APS Holdings
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.65 times more return on investment than APS Holdings. However, Hyundai Motor Co is 1.54 times less risky than APS Holdings. It trades about 0.05 of its potential returns per unit of risk. APS Holdings is currently generating about -0.03 per unit of risk. If you would invest 15,330,000 in Hyundai Motor Co on September 13, 2024 and sell it today you would earn a total of 240,000 from holding Hyundai Motor Co or generate 1.57% 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. APS Holdings
Performance |
| Timeline |
| Hyundai Motor |
| APS Holdings |
Hyundai and APS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and APS Holdings
The main advantage of trading using opposite Hyundai and APS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, APS Holdings 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 APS Holdings will offset losses from the drop in APS Holdings' long position.| Hyundai vs. Hyundai Motor Co | Hyundai vs. Solution Advanced Technology | Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind |
| APS Holdings vs. Hankook Steel Co | APS Holdings vs. Samhyun Steel Co | APS Holdings vs. Hyundai Home Shopping | APS Holdings vs. Fine Besteel 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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