Correlation Between Hyundai and Clean Science
Can any of the company-specific risk be diversified away by investing in both Hyundai and Clean Science 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 Clean Science 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 Clean Science co, you can compare the effects of market volatilities on Hyundai and Clean Science 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 Clean Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Clean Science.
Diversification Opportunities for Hyundai and Clean Science
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hyundai and Clean is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Clean Science co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Science co 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 Clean Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Science co has no effect on the direction of Hyundai i.e., Hyundai and Clean Science go up and down completely randomly.
Pair Corralation between Hyundai and Clean Science
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 1.56 times more return on investment than Clean Science. However, Hyundai is 1.56 times more volatile than Clean Science co. It trades about -0.08 of its potential returns per unit of risk. Clean Science co is currently generating about -0.54 per unit of risk. If you would invest 16,850,000 in Hyundai Motor Co on August 28, 2024 and sell it today you would lose (500,000) from holding Hyundai Motor Co or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Clean Science co
Performance |
| Timeline |
| Hyundai Motor |
| Clean Science co |
Hyundai and Clean Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Clean Science
The main advantage of trading using opposite Hyundai and Clean Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Clean Science 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 Clean Science will offset losses from the drop in Clean Science's long position.| Hyundai vs. Lake Materials Co | Hyundai vs. KB Financial Group | Hyundai vs. Jeju Air Co | Hyundai vs. LAKE MATERIALS LTD |
| Clean Science vs. Samsung Electronics Co | Clean Science vs. Samsung Electronics Co | Clean Science vs. Hyundai Motor Co | Clean Science 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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