Correlation Between Hyundai and Wing Yip
Can any of the company-specific risk be diversified away by investing in both Hyundai and Wing Yip 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 Wing Yip 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 Wing Yip Food, you can compare the effects of market volatilities on Hyundai and Wing Yip 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 Wing Yip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Wing Yip.
Diversification Opportunities for Hyundai and Wing Yip
Very good diversification
The 3 months correlation between Hyundai and Wing is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Wing Yip Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wing Yip Food 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 Wing Yip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wing Yip Food has no effect on the direction of Hyundai i.e., Hyundai and Wing Yip go up and down completely randomly.
Pair Corralation between Hyundai and Wing Yip
Assuming the 90 days trading horizon Hyundai Motor Co is expected to under-perform the Wing Yip. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Motor Co is 7.08 times less risky than Wing Yip. The stock trades about -0.04 of its potential returns per unit of risk. The Wing Yip Food is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 209,500 in Wing Yip Food on August 30, 2024 and sell it today you would earn a total of 25,000 from holding Wing Yip Food or generate 11.93% 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. Wing Yip Food
Performance |
| Timeline |
| Hyundai Motor |
| Wing Yip Food |
Hyundai and Wing Yip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Wing Yip
The main advantage of trading using opposite Hyundai and Wing Yip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Wing Yip 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 Wing Yip will offset losses from the drop in Wing Yip's long position.| Hyundai vs. Iljin Materials Co | Hyundai vs. ChipsMedia | Hyundai vs. Pan Entertainment Co | Hyundai vs. SKONEC Entertainment Co |
| Wing Yip vs. Amogreentech Co | Wing Yip vs. POSCO M TECH Co | Wing Yip vs. Konan Technology | Wing Yip vs. Daelim Trading 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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