Correlation Between GoldMining and Hyundai
Can any of the company-specific risk be diversified away by investing in both GoldMining 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 GoldMining and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Hyundai Motor, you can compare the effects of market volatilities on GoldMining 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 GoldMining with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Hyundai.
Diversification Opportunities for GoldMining and Hyundai
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between GoldMining and Hyundai is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and GoldMining 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 GoldMining 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 GoldMining i.e., GoldMining and Hyundai go up and down completely randomly.
Pair Corralation between GoldMining and Hyundai
Assuming the 90 days trading horizon GoldMining is expected to under-perform the Hyundai. In addition to that, GoldMining is 1.11 times more volatile than Hyundai Motor. It trades about -0.11 of its total potential returns per unit of risk. Hyundai Motor is currently generating about 0.01 per unit of volatility. If you would invest 5,260 in Hyundai Motor on September 15, 2024 and sell it today you would earn a total of 0.00 from holding Hyundai Motor or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 68.18% |
| Values | Daily Returns |
GoldMining vs. Hyundai Motor
Performance |
| Timeline |
| GoldMining |
| Hyundai Motor |
GoldMining and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Hyundai
The main advantage of trading using opposite GoldMining and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining 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.| GoldMining vs. Samsung Electronics Co | GoldMining vs. Samsung Electronics Co | GoldMining vs. Hyundai Motor | GoldMining vs. Reliance Industries Ltd |
| Hyundai vs. AMG Advanced Metallurgical | Hyundai vs. GoldMining | Hyundai vs. Verizon Communications | Hyundai vs. Metals Exploration Plc |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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