Correlation Between Hyundai and EASY HOLDINGS
Can any of the company-specific risk be diversified away by investing in both Hyundai and EASY HOLDINGS 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 EASY HOLDINGS 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 EASY HOLDINGS Co, you can compare the effects of market volatilities on Hyundai and EASY HOLDINGS 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 EASY HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and EASY HOLDINGS.
Diversification Opportunities for Hyundai and EASY HOLDINGS
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and EASY is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and EASY HOLDINGS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EASY HOLDINGS 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 EASY HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EASY HOLDINGS has no effect on the direction of Hyundai i.e., Hyundai and EASY HOLDINGS go up and down completely randomly.
Pair Corralation between Hyundai and EASY HOLDINGS
Assuming the 90 days trading horizon Hyundai is expected to generate 9.66 times less return on investment than EASY HOLDINGS. In addition to that, Hyundai is 1.15 times more volatile than EASY HOLDINGS Co. It trades about 0.03 of its total potential returns per unit of risk. EASY HOLDINGS Co is currently generating about 0.37 per unit of volatility. If you would invest 261,000 in EASY HOLDINGS Co on August 29, 2024 and sell it today you would earn a total of 35,000 from holding EASY HOLDINGS Co or generate 13.41% 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. EASY HOLDINGS Co
Performance |
| Timeline |
| Hyundai Motor |
| EASY HOLDINGS |
Hyundai and EASY HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and EASY HOLDINGS
The main advantage of trading using opposite Hyundai and EASY HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, EASY HOLDINGS 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 EASY HOLDINGS will offset losses from the drop in EASY HOLDINGS's long position.| Hyundai vs. Hyundai Motor Co | Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind | Hyundai vs. Mirae Asset Daewoo |
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 Stocks Directory module to find actively traded stocks across global markets.
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