Correlation Between Hyundai Home and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Hyundai Home and BIT Computer 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 Home and BIT Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Home Shopping and BIT Computer Co, you can compare the effects of market volatilities on Hyundai Home and BIT Computer 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 Home with a short position of BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Home and BIT Computer.
Diversification Opportunities for Hyundai Home and BIT Computer
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and BIT is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Home Shopping and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer and Hyundai Home 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 Home Shopping are associated (or correlated) with BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Hyundai Home i.e., Hyundai Home and BIT Computer go up and down completely randomly.
Pair Corralation between Hyundai Home and BIT Computer
Assuming the 90 days trading horizon Hyundai Home Shopping is expected to under-perform the BIT Computer. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Home Shopping is 1.06 times less risky than BIT Computer. The stock trades about -0.16 of its potential returns per unit of risk. The BIT Computer Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 495,000 in BIT Computer Co on August 30, 2024 and sell it today you would earn a total of 13,000 from holding BIT Computer Co or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Home Shopping vs. BIT Computer Co
Performance |
| Timeline |
| Hyundai Home Shopping |
| BIT Computer |
Hyundai Home and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Home and BIT Computer
The main advantage of trading using opposite Hyundai Home and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Home position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.| Hyundai Home vs. AptaBio Therapeutics | Hyundai Home vs. Daewoo SBI SPAC | Hyundai Home vs. Dream Security co | Hyundai Home vs. Microfriend |
| BIT Computer vs. Samsung Electronics Co | BIT Computer vs. Samsung Electronics Co | BIT Computer vs. LG Energy Solution | BIT Computer vs. SK Hynix |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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