Correlation Between Hyundai and NEXTIN
Can any of the company-specific risk be diversified away by investing in both Hyundai and NEXTIN 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 NEXTIN 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 NEXTIN Inc, you can compare the effects of market volatilities on Hyundai and NEXTIN 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 NEXTIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and NEXTIN.
Diversification Opportunities for Hyundai and NEXTIN
Weak diversification
The 3 months correlation between Hyundai and NEXTIN is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and NEXTIN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXTIN Inc 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 NEXTIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXTIN Inc has no effect on the direction of Hyundai i.e., Hyundai and NEXTIN go up and down completely randomly.
Pair Corralation between Hyundai and NEXTIN
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.57 times more return on investment than NEXTIN. However, Hyundai Motor Co is 1.75 times less risky than NEXTIN. It trades about -0.09 of its potential returns per unit of risk. NEXTIN Inc is currently generating about -0.23 per unit of risk. If you would invest 16,012,900 in Hyundai Motor Co on December 1, 2024 and sell it today you would lose (512,900) from holding Hyundai Motor Co or give up 3.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. NEXTIN Inc
Performance |
| Timeline |
| Hyundai Motor |
| NEXTIN Inc |
Hyundai and NEXTIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and NEXTIN
The main advantage of trading using opposite Hyundai and NEXTIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, NEXTIN 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 NEXTIN will offset losses from the drop in NEXTIN's long position.| Hyundai vs. Sangsin Energy Display | Hyundai vs. BIT Computer Co | Hyundai vs. Hanshin Construction Co | Hyundai vs. Nam Hwa Construction |
| NEXTIN vs. Parksystems Corp | NEXTIN vs. LEENO Industrial | NEXTIN vs. Tesna Inc | NEXTIN vs. Tokai Carbon Korea |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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