Correlation Between Hyundai and Cuckoo Electronics
Can any of the company-specific risk be diversified away by investing in both Hyundai and Cuckoo Electronics 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 Cuckoo Electronics 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 Cuckoo Electronics Co, you can compare the effects of market volatilities on Hyundai and Cuckoo Electronics 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 Cuckoo Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Cuckoo Electronics.
Diversification Opportunities for Hyundai and Cuckoo Electronics
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hyundai and Cuckoo is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Cuckoo Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cuckoo Electronics 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 Cuckoo Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cuckoo Electronics has no effect on the direction of Hyundai i.e., Hyundai and Cuckoo Electronics go up and down completely randomly.
Pair Corralation between Hyundai and Cuckoo Electronics
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 1.45 times more return on investment than Cuckoo Electronics. However, Hyundai is 1.45 times more volatile than Cuckoo Electronics Co. It trades about -0.02 of its potential returns per unit of risk. Cuckoo Electronics Co is currently generating about -0.14 per unit of risk. If you would invest 16,500,000 in Hyundai Motor Co on August 31, 2024 and sell it today you would lose (190,000) from holding Hyundai Motor Co or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Cuckoo Electronics Co
Performance |
| Timeline |
| Hyundai Motor |
| Cuckoo Electronics |
Hyundai and Cuckoo Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Cuckoo Electronics
The main advantage of trading using opposite Hyundai and Cuckoo Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Cuckoo Electronics 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 Cuckoo Electronics will offset losses from the drop in Cuckoo Electronics' long position.| Hyundai vs. Korea Electronic Certification | Hyundai vs. Lotte Non Life Insurance | Hyundai vs. Cuckoo Electronics Co | Hyundai vs. LG Electronics |
| Cuckoo Electronics vs. LG Display | Cuckoo Electronics vs. Hyundai Motor | Cuckoo Electronics vs. Hyundai Motor Co | Cuckoo Electronics vs. Hyundai Motor 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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