Correlation Between Cots Technology and Hyundai
Can any of the company-specific risk be diversified away by investing in both Cots 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 Cots Technology and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cots Technology Co and Hyundai Motor, you can compare the effects of market volatilities on Cots 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 Cots Technology with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cots Technology and Hyundai.
Diversification Opportunities for Cots Technology and Hyundai
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cots and Hyundai is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cots Technology Co and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Cots 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 Cots 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 Cots Technology i.e., Cots Technology and Hyundai go up and down completely randomly.
Pair Corralation between Cots Technology and Hyundai
Assuming the 90 days trading horizon Cots Technology is expected to generate 6.34 times less return on investment than Hyundai. In addition to that, Cots Technology is 2.5 times more volatile than Hyundai Motor. It trades about 0.0 of its total potential returns per unit of risk. Hyundai Motor is currently generating about 0.05 per unit of volatility. If you would invest 14,581,800 in Hyundai Motor on September 20, 2024 and sell it today you would earn a total of 6,618,200 from holding Hyundai Motor or generate 45.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 68.74% |
| Values | Daily Returns |
Cots Technology Co vs. Hyundai Motor
Performance |
| Timeline |
| Cots Technology |
| Hyundai Motor |
Cots Technology and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cots Technology and Hyundai
The main advantage of trading using opposite Cots Technology and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cots 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.| Cots Technology vs. Samsung Electronics Co | Cots Technology vs. Samsung Electronics Co | Cots Technology vs. LG Energy Solution | Cots Technology vs. SK Hynix |
| Hyundai vs. E Investment Development | Hyundai vs. KTB Investment Securities | Hyundai vs. Woori Technology Investment | Hyundai vs. Kukil Metal 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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