Correlation Between Hyundai and MEDIPOST
Can any of the company-specific risk be diversified away by investing in both Hyundai and MEDIPOST 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 MEDIPOST 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 MEDIPOST Co, you can compare the effects of market volatilities on Hyundai and MEDIPOST 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 MEDIPOST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and MEDIPOST.
Diversification Opportunities for Hyundai and MEDIPOST
Very good diversification
The 3 months correlation between Hyundai and MEDIPOST is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and MEDIPOST Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIPOST 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 MEDIPOST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIPOST has no effect on the direction of Hyundai i.e., Hyundai and MEDIPOST go up and down completely randomly.
Pair Corralation between Hyundai and MEDIPOST
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.26 times more return on investment than MEDIPOST. However, Hyundai Motor Co is 3.82 times less risky than MEDIPOST. It trades about 0.03 of its potential returns per unit of risk. MEDIPOST Co is currently generating about -0.23 per unit of risk. If you would invest 16,620,000 in Hyundai Motor Co on November 28, 2024 and sell it today you would earn a total of 80,000 from holding Hyundai Motor Co or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Hyundai Motor Co vs. MEDIPOST Co
Performance |
| Timeline |
| Hyundai Motor |
| MEDIPOST |
Hyundai and MEDIPOST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and MEDIPOST
The main advantage of trading using opposite Hyundai and MEDIPOST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, MEDIPOST 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 MEDIPOST will offset losses from the drop in MEDIPOST's long position.| Hyundai vs. DB Insurance Co | Hyundai vs. Settlebank | Hyundai vs. Korean Reinsurance Co | Hyundai vs. Hanwha Life Insurance |
| MEDIPOST vs. Hanwha InvestmentSecurities Co | MEDIPOST vs. CU Tech Corp | MEDIPOST vs. Hanyang Digitech Co | MEDIPOST vs. Spolytech 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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