Correlation Between Guyoung Technology and Hyundai
Can any of the company-specific risk be diversified away by investing in both Guyoung Technology 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 Guyoung Technology and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guyoung Technology Co and Hyundai Motor Co, you can compare the effects of market volatilities on Guyoung Technology 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 Guyoung Technology with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guyoung Technology and Hyundai.
Diversification Opportunities for Guyoung Technology and Hyundai
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guyoung and Hyundai is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Guyoung Technology 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 Guyoung Technology 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 Guyoung Technology 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 Guyoung Technology i.e., Guyoung Technology and Hyundai go up and down completely randomly.
Pair Corralation between Guyoung Technology and Hyundai
Assuming the 90 days trading horizon Guyoung Technology Co is expected to under-perform the Hyundai. In addition to that, Guyoung Technology is 1.33 times more volatile than Hyundai Motor Co. It trades about -0.1 of its total potential returns per unit of risk. Hyundai Motor Co is currently generating about -0.1 per unit of volatility. If you would invest 15,740,000 in Hyundai Motor Co on September 24, 2024 and sell it today you would lose (660,000) from holding Hyundai Motor Co or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guyoung Technology Co vs. Hyundai Motor Co
Performance |
| Timeline |
| Guyoung Technology |
| Hyundai Motor |
Guyoung Technology and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guyoung Technology and Hyundai
The main advantage of trading using opposite Guyoung Technology and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guyoung Technology 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.| Guyoung Technology vs. Woori Technology Investment | Guyoung Technology vs. Samsung Card Co | Guyoung Technology vs. Korea Real Estate | Guyoung Technology vs. CHOROKBAEM PANY Co |
| Hyundai vs. Puloon Technology | Hyundai vs. Dgb Financial | Hyundai vs. Shinhan Financial Group | Hyundai vs. Guyoung Technology Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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