Correlation Between HB Technology and Hyundai
Can any of the company-specific risk be diversified away by investing in both HB 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 HB Technology and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HB Technology TD and Hyundai Motor, you can compare the effects of market volatilities on HB 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 HB Technology with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of HB Technology and Hyundai.
Diversification Opportunities for HB Technology and Hyundai
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 078150 and Hyundai is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding HB Technology TD and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and HB 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 HB Technology TD 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 HB Technology i.e., HB Technology and Hyundai go up and down completely randomly.
Pair Corralation between HB Technology and Hyundai
Assuming the 90 days trading horizon HB Technology is expected to generate 1.47 times less return on investment than Hyundai. In addition to that, HB Technology is 2.04 times more volatile than Hyundai Motor. It trades about 0.01 of its total potential returns per unit of risk. Hyundai Motor is currently generating about 0.03 per unit of volatility. If you would invest 18,807,800 in Hyundai Motor on August 29, 2024 and sell it today you would earn a total of 3,542,200 from holding Hyundai Motor or generate 18.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HB Technology TD vs. Hyundai Motor
Performance |
| Timeline |
| HB Technology TD |
| Hyundai Motor |
HB Technology and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HB Technology and Hyundai
The main advantage of trading using opposite HB Technology and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HB 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.| HB Technology vs. Korea Real Estate | HB Technology vs. Korea Ratings Co | HB Technology vs. IQuest Co | HB Technology vs. Wonbang Tech Co |
| Hyundai vs. InnoTherapy | Hyundai vs. Sung Bo Chemicals | Hyundai vs. LG Chemicals | Hyundai vs. Namhae Chemical |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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