Correlation Between Hyundai and Aurora World
Can any of the company-specific risk be diversified away by investing in both Hyundai and Aurora World 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 Aurora World 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 Aurora World, you can compare the effects of market volatilities on Hyundai and Aurora World 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 Aurora World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Aurora World.
Diversification Opportunities for Hyundai and Aurora World
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and Aurora is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Aurora World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora World 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 Aurora World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora World has no effect on the direction of Hyundai i.e., Hyundai and Aurora World go up and down completely randomly.
Pair Corralation between Hyundai and Aurora World
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 1.49 times more return on investment than Aurora World. However, Hyundai is 1.49 times more volatile than Aurora World. It trades about 0.1 of its potential returns per unit of risk. Aurora World is currently generating about -0.03 per unit of risk. If you would invest 6,644,759 in Hyundai Motor Co on September 4, 2024 and sell it today you would earn a total of 9,315,241 from holding Hyundai Motor Co or generate 140.19% 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. Aurora World
Performance |
| Timeline |
| Hyundai Motor |
| Aurora World |
Hyundai and Aurora World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Aurora World
The main advantage of trading using opposite Hyundai and Aurora World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Aurora World 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 Aurora World will offset losses from the drop in Aurora World's long position.| Hyundai vs. Chin Yang Chemical | Hyundai vs. Chorokbaem Healthcare Co | Hyundai vs. Sung Bo Chemicals | Hyundai vs. LG Chemicals |
| Aurora World vs. Grand Korea Leisure | Aurora World vs. Handok Clean Tech | Aurora World vs. Clean Science co | Aurora World vs. Daishin Information Communications |
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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