Correlation Between BIT Computer and Hyundai
Can any of the company-specific risk be diversified away by investing in both BIT Computer 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 BIT Computer and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BIT Computer Co and Hyundai Motor Co, you can compare the effects of market volatilities on BIT Computer 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 BIT Computer with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of BIT Computer and Hyundai.
Diversification Opportunities for BIT Computer and Hyundai
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BIT and Hyundai is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding BIT Computer 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 BIT Computer 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 BIT Computer 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 BIT Computer i.e., BIT Computer and Hyundai go up and down completely randomly.
Pair Corralation between BIT Computer and Hyundai
Assuming the 90 days trading horizon BIT Computer Co is expected to under-perform the Hyundai. In addition to that, BIT Computer is 1.6 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 0.08 per unit of volatility. If you would invest 9,533,263 in Hyundai Motor Co on August 31, 2024 and sell it today you would earn a total of 6,166,737 from holding Hyundai Motor Co or generate 64.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BIT Computer Co vs. Hyundai Motor Co
Performance |
| Timeline |
| BIT Computer |
| Hyundai Motor |
BIT Computer and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BIT Computer and Hyundai
The main advantage of trading using opposite BIT Computer and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BIT Computer 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.| BIT Computer vs. AptaBio Therapeutics | BIT Computer vs. KT Hitel | BIT Computer vs. SillaJen | BIT Computer vs. Cytogen |
| Hyundai vs. Hyundai Motor Co | Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind | Hyundai vs. Mirae Asset Daewoo |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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