Correlation Between Hyundai and ADM Korea
Can any of the company-specific risk be diversified away by investing in both Hyundai and ADM Korea 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 ADM Korea 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 ADM Korea, you can compare the effects of market volatilities on Hyundai and ADM Korea 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 ADM Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and ADM Korea.
Diversification Opportunities for Hyundai and ADM Korea
Very good diversification
The 3 months correlation between Hyundai and ADM is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and ADM Korea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADM Korea 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 ADM Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADM Korea has no effect on the direction of Hyundai i.e., Hyundai and ADM Korea go up and down completely randomly.
Pair Corralation between Hyundai and ADM Korea
Assuming the 90 days trading horizon Hyundai Motor Co is expected to under-perform the ADM Korea. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Motor Co is 2.44 times less risky than ADM Korea. The stock trades about -0.18 of its potential returns per unit of risk. The ADM Korea is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 301,000 in ADM Korea on August 25, 2024 and sell it today you would earn a total of 50,500 from holding ADM Korea or generate 16.78% 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. ADM Korea
Performance |
| Timeline |
| Hyundai Motor |
| ADM Korea |
Hyundai and ADM Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and ADM Korea
The main advantage of trading using opposite Hyundai and ADM Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, ADM Korea 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 ADM Korea will offset losses from the drop in ADM Korea's long position.| Hyundai vs. Hyundai Motor Co | Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind | Hyundai vs. Mirae Asset Daewoo |
| ADM Korea vs. Samsung Electronics Co | ADM Korea vs. Samsung Electronics Co | ADM Korea vs. LG Energy Solution | ADM Korea vs. SK Hynix |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |