Correlation Between Hyundai and Adaptive Plasma
Can any of the company-specific risk be diversified away by investing in both Hyundai and Adaptive Plasma 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 Adaptive Plasma 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 Adaptive Plasma Technology, you can compare the effects of market volatilities on Hyundai and Adaptive Plasma 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 Adaptive Plasma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Adaptive Plasma.
Diversification Opportunities for Hyundai and Adaptive Plasma
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hyundai and Adaptive is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Adaptive Plasma Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptive Plasma Tech 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 Adaptive Plasma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptive Plasma Tech has no effect on the direction of Hyundai i.e., Hyundai and Adaptive Plasma go up and down completely randomly.
Pair Corralation between Hyundai and Adaptive Plasma
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.6 times more return on investment than Adaptive Plasma. However, Hyundai Motor Co is 1.67 times less risky than Adaptive Plasma. It trades about -0.1 of its potential returns per unit of risk. Adaptive Plasma Technology is currently generating about -0.24 per unit of risk. If you would invest 18,054,300 in Hyundai Motor Co on September 2, 2024 and sell it today you would lose (2,034,300) from holding Hyundai Motor Co or give up 11.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Adaptive Plasma Technology
Performance |
| Timeline |
| Hyundai Motor |
| Adaptive Plasma Tech |
Hyundai and Adaptive Plasma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Adaptive Plasma
The main advantage of trading using opposite Hyundai and Adaptive Plasma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Adaptive Plasma 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 Adaptive Plasma will offset losses from the drop in Adaptive Plasma's long position.| Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind | Hyundai vs. Mirae Asset Daewoo | Hyundai vs. Shinhan WTI Futures |
| Adaptive Plasma vs. SK Hynix | Adaptive Plasma vs. LX Semicon Co | Adaptive Plasma vs. People Technology | Adaptive Plasma vs. SIMMTECH 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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