Correlation Between Busan Industrial and Hyundai
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and Hyundai 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 Busan Industrial and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Industrial Co and Hyundai Motor Co, you can compare the effects of market volatilities on Busan Industrial and Hyundai 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 Busan Industrial with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and Hyundai.
Diversification Opportunities for Busan Industrial and Hyundai
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Busan and Hyundai is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Busan Industrial 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 Busan Industrial Co are associated (or correlated) with Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of Busan Industrial i.e., Busan Industrial and Hyundai go up and down completely randomly.
Pair Corralation between Busan Industrial and Hyundai
Assuming the 90 days trading horizon Busan Industrial is expected to generate 10.09 times less return on investment than Hyundai. In addition to that, Busan Industrial is 1.29 times more volatile than Hyundai Motor Co. It trades about 0.01 of its total potential returns per unit of risk. Hyundai Motor Co is currently generating about 0.09 per unit of volatility. If you would invest 10,777,800 in Hyundai Motor Co on August 28, 2024 and sell it today you would earn a total of 4,962,200 from holding Hyundai Motor Co or generate 46.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Industrial Co vs. Hyundai Motor Co
Performance |
| Timeline |
| Busan Industrial |
| Hyundai Motor |
Busan Industrial and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and Hyundai
The main advantage of trading using opposite Busan Industrial and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| Busan Industrial vs. Sangsin Energy Display | Busan Industrial vs. Inzi Display CoLtd | Busan Industrial vs. Top Material Co | Busan Industrial vs. Ssangyong Materials Corp |
| Hyundai vs. Iljin Display | Hyundai vs. Korea Air Svc | Hyundai vs. BIT Computer Co | Hyundai vs. Osang Healthcare Co,Ltd |
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.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |