Correlation Between Hyundai and Theragen Etex
Can any of the company-specific risk be diversified away by investing in both Hyundai and Theragen Etex 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 Theragen Etex 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 Theragen Etex CoLtd, you can compare the effects of market volatilities on Hyundai and Theragen Etex 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 Theragen Etex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Theragen Etex.
Diversification Opportunities for Hyundai and Theragen Etex
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Theragen is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Theragen Etex CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Theragen Etex CoLtd 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 Theragen Etex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Theragen Etex CoLtd has no effect on the direction of Hyundai i.e., Hyundai and Theragen Etex go up and down completely randomly.
Pair Corralation between Hyundai and Theragen Etex
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.92 times more return on investment than Theragen Etex. However, Hyundai Motor Co is 1.08 times less risky than Theragen Etex. It trades about 0.06 of its potential returns per unit of risk. Theragen Etex CoLtd is currently generating about -0.02 per unit of risk. If you would invest 14,809,500 in Hyundai Motor Co on November 3, 2024 and sell it today you would earn a total of 1,810,500 from holding Hyundai Motor Co or generate 12.23% 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. Theragen Etex CoLtd
Performance |
| Timeline |
| Hyundai Motor |
| Theragen Etex CoLtd |
Hyundai and Theragen Etex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Theragen Etex
The main advantage of trading using opposite Hyundai and Theragen Etex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Theragen Etex 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 Theragen Etex will offset losses from the drop in Theragen Etex's long position.| Hyundai vs. Daejung Chemicals Metals | Hyundai vs. Dongbang Transport Logistics | Hyundai vs. SH Energy Chemical | Hyundai vs. Miwon Chemical |
| Theragen Etex vs. Kbi Metal Co | Theragen Etex vs. Dongil Metal Co | Theragen Etex vs. Eagon Industrial Co | Theragen Etex vs. Formetal Co |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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