Correlation Between Hyundai and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Hyundai and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Hyundai and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Dow Jones.
Diversification Opportunities for Hyundai and Dow Jones
Very good diversification
The 3 months correlation between Hyundai and Dow is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Hyundai i.e., Hyundai and Dow Jones go up and down completely randomly.
Pair Corralation between Hyundai and Dow Jones
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 3.53 times more return on investment than Dow Jones. However, Hyundai is 3.53 times more volatile than Dow Jones Industrial. It trades about 0.09 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of risk. If you would invest 10,787,700 in Hyundai Motor Co on August 28, 2024 and sell it today you would earn a total of 5,562,300 from holding Hyundai Motor Co or generate 51.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.69% |
| Values | Daily Returns |
Hyundai Motor Co vs. Dow Jones Industrial
Performance |
| Timeline |
Hyundai and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Hyundai Motor Co
Pair trading matchups for Hyundai
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Hyundai and Dow Jones
The main advantage of trading using opposite Hyundai and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Hyundai vs. Lake Materials Co | Hyundai vs. KB Financial Group | Hyundai vs. Jeju Air Co | Hyundai vs. LAKE MATERIALS LTD |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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