Correlation Between Hyundai and Ilji Technology
Can any of the company-specific risk be diversified away by investing in both Hyundai and Ilji Technology 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 Ilji Technology 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 Ilji Technology Co, you can compare the effects of market volatilities on Hyundai and Ilji Technology 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 Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Ilji Technology.
Diversification Opportunities for Hyundai and Ilji Technology
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Ilji is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Ilji Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilji Technology 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 Ilji Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilji Technology has no effect on the direction of Hyundai i.e., Hyundai and Ilji Technology go up and down completely randomly.
Pair Corralation between Hyundai and Ilji Technology
Assuming the 90 days trading horizon Hyundai is expected to generate 1.35 times less return on investment than Ilji Technology. But when comparing it to its historical volatility, Hyundai Motor Co is 1.65 times less risky than Ilji Technology. It trades about 0.14 of its potential returns per unit of risk. Ilji Technology Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 369,500 in Ilji Technology Co on November 7, 2024 and sell it today you would earn a total of 19,500 from holding Ilji Technology Co or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Ilji Technology Co
Performance |
| Timeline |
| Hyundai Motor |
| Ilji Technology |
Hyundai and Ilji Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Ilji Technology
The main advantage of trading using opposite Hyundai and Ilji Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Ilji Technology 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 Ilji Technology will offset losses from the drop in Ilji Technology's long position.| Hyundai vs. Puloon Technology | Hyundai vs. Eagle Veterinary Technology | Hyundai vs. Hotel Shilla Co | Hyundai vs. UJU Electronics Co |
| Ilji Technology vs. Samsung Electronics Co | Ilji Technology vs. Samsung Electronics Co | Ilji Technology vs. Hyundai Motor Co | Ilji Technology vs. Hyundai Motor |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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