Correlation Between I-Components and Hyundai
Can any of the company-specific risk be diversified away by investing in both I-Components 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 I-Components and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between i Components Co and Hyundai Motor Co, you can compare the effects of market volatilities on I-Components 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 I-Components with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of I-Components and Hyundai.
Diversification Opportunities for I-Components and Hyundai
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between I-Components and Hyundai is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding i Components 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 I-Components 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 i Components 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 I-Components i.e., I-Components and Hyundai go up and down completely randomly.
Pair Corralation between I-Components and Hyundai
Assuming the 90 days trading horizon i Components Co is expected to generate 0.38 times more return on investment than Hyundai. However, i Components Co is 2.6 times less risky than Hyundai. It trades about 0.15 of its potential returns per unit of risk. Hyundai Motor Co is currently generating about -0.07 per unit of risk. If you would invest 460,000 in i Components Co on September 26, 2024 and sell it today you would earn a total of 10,500 from holding i Components Co or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
i Components Co vs. Hyundai Motor Co
Performance |
| Timeline |
| i Components |
| Hyundai Motor |
I-Components and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I-Components and Hyundai
The main advantage of trading using opposite I-Components and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I-Components 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.| I-Components vs. Samsung Electronics Co | I-Components vs. Samsung Electronics Co | I-Components vs. LG Energy Solution | I-Components vs. SK Hynix |
| Hyundai vs. Hyundai Motor Co | Hyundai vs. AnterogenCoLtd | Hyundai vs. MEDIPOST Co | Hyundai vs. Gyeongnam Steel 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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