Correlation Between Hyundai Green and WISE ITech
Can any of the company-specific risk be diversified away by investing in both Hyundai Green and WISE ITech 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 Green and WISE ITech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Green Food and WISE iTech Co, you can compare the effects of market volatilities on Hyundai Green and WISE ITech 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 Green with a short position of WISE ITech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Green and WISE ITech.
Diversification Opportunities for Hyundai Green and WISE ITech
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and WISE is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Green Food and WISE iTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WISE iTech and Hyundai Green 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 Green Food are associated (or correlated) with WISE ITech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WISE iTech has no effect on the direction of Hyundai Green i.e., Hyundai Green and WISE ITech go up and down completely randomly.
Pair Corralation between Hyundai Green and WISE ITech
Assuming the 90 days trading horizon Hyundai Green Food is expected to generate 0.66 times more return on investment than WISE ITech. However, Hyundai Green Food is 1.51 times less risky than WISE ITech. It trades about 0.45 of its potential returns per unit of risk. WISE iTech Co is currently generating about -0.11 per unit of risk. If you would invest 1,164,000 in Hyundai Green Food on August 29, 2024 and sell it today you would earn a total of 177,000 from holding Hyundai Green Food or generate 15.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Green Food vs. WISE iTech Co
Performance |
| Timeline |
| Hyundai Green Food |
| WISE iTech |
Hyundai Green and WISE ITech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Green and WISE ITech
The main advantage of trading using opposite Hyundai Green and WISE ITech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Green position performs unexpectedly, WISE ITech 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 WISE ITech will offset losses from the drop in WISE ITech's long position.| Hyundai Green vs. Samsung Electronics Co | Hyundai Green vs. Samsung Electronics Co | Hyundai Green vs. LG Energy Solution | Hyundai Green 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |