Correlation Between Hyundai and Chin Yang
Can any of the company-specific risk be diversified away by investing in both Hyundai and Chin Yang 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 Chin Yang 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 Chin Yang Chemical, you can compare the effects of market volatilities on Hyundai and Chin Yang 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 Chin Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Chin Yang.
Diversification Opportunities for Hyundai and Chin Yang
Very weak diversification
The 3 months correlation between Hyundai and Chin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Chin Yang Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chin Yang Chemical 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 Chin Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chin Yang Chemical has no effect on the direction of Hyundai i.e., Hyundai and Chin Yang go up and down completely randomly.
Pair Corralation between Hyundai and Chin Yang
Assuming the 90 days trading horizon Hyundai Motor Co is expected to under-perform the Chin Yang. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Motor Co is 2.9 times less risky than Chin Yang. The stock trades about -0.05 of its potential returns per unit of risk. The Chin Yang Chemical is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 274,500 in Chin Yang Chemical on September 12, 2024 and sell it today you would earn a total of 24,000 from holding Chin Yang Chemical or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Chin Yang Chemical
Performance |
| Timeline |
| Hyundai Motor |
| Chin Yang Chemical |
Hyundai and Chin Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Chin Yang
The main advantage of trading using opposite Hyundai and Chin Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Chin Yang 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 Chin Yang will offset losses from the drop in Chin Yang's long position.| Hyundai vs. Hyundai Motor Co | Hyundai vs. Solution Advanced Technology | Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind |
| Chin Yang vs. Samsung Electronics Co | Chin Yang vs. Samsung Electronics Co | Chin Yang vs. SK Hynix | Chin Yang vs. POSCO Holdings |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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