Correlation Between Hyundai and DAEYANG ELECTRICCoLtd
Can any of the company-specific risk be diversified away by investing in both Hyundai and DAEYANG ELECTRICCoLtd 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 DAEYANG ELECTRICCoLtd 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 DAEYANG ELECTRICCoLtd, you can compare the effects of market volatilities on Hyundai and DAEYANG ELECTRICCoLtd 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 DAEYANG ELECTRICCoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and DAEYANG ELECTRICCoLtd.
Diversification Opportunities for Hyundai and DAEYANG ELECTRICCoLtd
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyundai and DAEYANG is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and DAEYANG ELECTRICCoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEYANG ELECTRICCoLtd 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 DAEYANG ELECTRICCoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEYANG ELECTRICCoLtd has no effect on the direction of Hyundai i.e., Hyundai and DAEYANG ELECTRICCoLtd go up and down completely randomly.
Pair Corralation between Hyundai and DAEYANG ELECTRICCoLtd
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.94 times more return on investment than DAEYANG ELECTRICCoLtd. However, Hyundai Motor Co is 1.06 times less risky than DAEYANG ELECTRICCoLtd. It trades about 0.1 of its potential returns per unit of risk. DAEYANG ELECTRICCoLtd is currently generating about 0.01 per unit of risk. If you would invest 6,644,759 in Hyundai Motor Co on September 4, 2024 and sell it today you would earn a total of 9,315,241 from holding Hyundai Motor Co or generate 140.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. DAEYANG ELECTRICCoLtd
Performance |
| Timeline |
| Hyundai Motor |
| DAEYANG ELECTRICCoLtd |
Hyundai and DAEYANG ELECTRICCoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and DAEYANG ELECTRICCoLtd
The main advantage of trading using opposite Hyundai and DAEYANG ELECTRICCoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, DAEYANG ELECTRICCoLtd 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 DAEYANG ELECTRICCoLtd will offset losses from the drop in DAEYANG ELECTRICCoLtd's long position.| Hyundai vs. Chin Yang Chemical | Hyundai vs. Chorokbaem Healthcare Co | Hyundai vs. Sung Bo Chemicals | Hyundai vs. LG Chemicals |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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