Correlation Between Hyundai and Amorepacific Corp
Can any of the company-specific risk be diversified away by investing in both Hyundai and Amorepacific Corp 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 Amorepacific Corp 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 Amorepacific Corp, you can compare the effects of market volatilities on Hyundai and Amorepacific Corp 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 Amorepacific Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Amorepacific Corp.
Diversification Opportunities for Hyundai and Amorepacific Corp
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Amorepacific is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Amorepacific Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amorepacific Corp 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 Amorepacific Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amorepacific Corp has no effect on the direction of Hyundai i.e., Hyundai and Amorepacific Corp go up and down completely randomly.
Pair Corralation between Hyundai and Amorepacific Corp
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.6 times more return on investment than Amorepacific Corp. However, Hyundai Motor Co is 1.67 times less risky than Amorepacific Corp. It trades about 0.08 of its potential returns per unit of risk. Amorepacific Corp is currently generating about 0.03 per unit of risk. If you would invest 9,915,443 in Hyundai Motor Co on August 28, 2024 and sell it today you would earn a total of 5,824,557 from holding Hyundai Motor Co or generate 58.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Hyundai Motor Co vs. Amorepacific Corp
Performance |
| Timeline |
| Hyundai Motor |
| Amorepacific Corp |
Hyundai and Amorepacific Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Amorepacific Corp
The main advantage of trading using opposite Hyundai and Amorepacific Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Amorepacific Corp 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 Amorepacific Corp will offset losses from the drop in Amorepacific Corp's long position.| Hyundai vs. Iljin Display | Hyundai vs. Korea Air Svc | Hyundai vs. BIT Computer Co | Hyundai vs. Osang Healthcare Co,Ltd |
| Amorepacific Corp vs. E Investment Development | Amorepacific Corp vs. Sangsangin Investment Securities | Amorepacific Corp vs. Dongwon Metal Co | Amorepacific Corp vs. Atinum Investment 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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