Correlation Between Hyundai and People Technology
Can any of the company-specific risk be diversified away by investing in both Hyundai and People Technology 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 People Technology 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 People Technology, you can compare the effects of market volatilities on Hyundai and People Technology 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 People Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and People Technology.
Diversification Opportunities for Hyundai and People Technology
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and People is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and People Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People Technology 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 People Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Technology has no effect on the direction of Hyundai i.e., Hyundai and People Technology go up and down completely randomly.
Pair Corralation between Hyundai and People Technology
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.63 times more return on investment than People Technology. However, Hyundai Motor Co is 1.57 times less risky than People Technology. It trades about -0.02 of its potential returns per unit of risk. People Technology is currently generating about -0.05 per unit of risk. If you would invest 16,300,000 in Hyundai Motor Co on October 19, 2024 and sell it today you would lose (300,000) from holding Hyundai Motor Co or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. People Technology
Performance |
| Timeline |
| Hyundai Motor |
| People Technology |
Hyundai and People Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and People Technology
The main advantage of trading using opposite Hyundai and People Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, People Technology 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 People Technology will offset losses from the drop in People Technology's long position.| Hyundai vs. Daesung Industrial Co | Hyundai vs. Shinil Industrial Co | Hyundai vs. DRB Industrial Co | Hyundai vs. Songwon Industrial Co |
| People Technology vs. Netmarble Games Corp | People Technology vs. Korea Shipbuilding Offshore | People Technology vs. ChipsMedia | People Technology vs. Sam Yang Foods |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |