Correlation Between Aurora World and Hyundai Home
Can any of the company-specific risk be diversified away by investing in both Aurora World and Hyundai Home 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 Aurora World and Hyundai Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurora World and Hyundai Home Shopping, you can compare the effects of market volatilities on Aurora World and Hyundai Home 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 Aurora World with a short position of Hyundai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurora World and Hyundai Home.
Diversification Opportunities for Aurora World and Hyundai Home
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aurora and Hyundai is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aurora World and Hyundai Home Shopping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Home Shopping and Aurora World 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 Aurora World are associated (or correlated) with Hyundai Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Home Shopping has no effect on the direction of Aurora World i.e., Aurora World and Hyundai Home go up and down completely randomly.
Pair Corralation between Aurora World and Hyundai Home
Assuming the 90 days trading horizon Aurora World is expected to under-perform the Hyundai Home. But the stock apears to be less risky and, when comparing its historical volatility, Aurora World is 1.27 times less risky than Hyundai Home. The stock trades about -0.03 of its potential returns per unit of risk. The Hyundai Home Shopping is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 5,265,443 in Hyundai Home Shopping on September 14, 2024 and sell it today you would lose (745,443) from holding Hyundai Home Shopping or give up 14.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Aurora World vs. Hyundai Home Shopping
Performance |
| Timeline |
| Aurora World |
| Hyundai Home Shopping |
Aurora World and Hyundai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurora World and Hyundai Home
The main advantage of trading using opposite Aurora World and Hyundai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurora World position performs unexpectedly, Hyundai Home 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 Home will offset losses from the drop in Hyundai Home's long position.| Aurora World vs. Hyundai Home Shopping | Aurora World vs. Polaris Office Corp | Aurora World vs. LG Household Healthcare | Aurora World vs. INFINITT Healthcare Co |
| Hyundai Home vs. WooDeumGee Farm Co, | Hyundai Home vs. KCC Engineering Construction | Hyundai Home vs. Youngchang Chemical Co | Hyundai Home vs. GS Engineering Construction |
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 CEOs Directory module to screen CEOs from public companies around the world.
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