Correlation Between Hyundai and Namhwa Industrial
Can any of the company-specific risk be diversified away by investing in both Hyundai and Namhwa Industrial 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 Namhwa Industrial 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 Namhwa Industrial Co, you can compare the effects of market volatilities on Hyundai and Namhwa Industrial 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 Namhwa Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Namhwa Industrial.
Diversification Opportunities for Hyundai and Namhwa Industrial
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hyundai and Namhwa is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Namhwa Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namhwa Industrial 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 Namhwa Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namhwa Industrial has no effect on the direction of Hyundai i.e., Hyundai and Namhwa Industrial go up and down completely randomly.
Pair Corralation between Hyundai and Namhwa Industrial
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 1.34 times more return on investment than Namhwa Industrial. However, Hyundai is 1.34 times more volatile than Namhwa Industrial Co. It trades about 0.09 of its potential returns per unit of risk. Namhwa Industrial Co is currently generating about -0.05 per unit of risk. If you would invest 8,016,809 in Hyundai Motor Co on November 2, 2024 and sell it today you would earn a total of 7,683,191 from holding Hyundai Motor Co or generate 95.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Namhwa Industrial Co
Performance |
| Timeline |
| Hyundai Motor |
| Namhwa Industrial |
Hyundai and Namhwa Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Namhwa Industrial
The main advantage of trading using opposite Hyundai and Namhwa Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Namhwa Industrial 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 Namhwa Industrial will offset losses from the drop in Namhwa Industrial's long position.| Hyundai vs. Husteel | Hyundai vs. Korea Investment Holdings | Hyundai vs. Daechang Steel Co | Hyundai vs. Automobile Pc |
| Namhwa Industrial vs. Ssangyong Information Communication | Namhwa Industrial vs. Pan Entertainment Co | Namhwa Industrial vs. Nasmedia Co | Namhwa Industrial vs. SKONEC Entertainment 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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