Correlation Between PKSHA TECHNOLOGY and Hyundai
Can any of the company-specific risk be diversified away by investing in both PKSHA 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 PKSHA TECHNOLOGY and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PKSHA TECHNOLOGY INC and Hyundai Motor, you can compare the effects of market volatilities on PKSHA 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 PKSHA TECHNOLOGY with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and Hyundai.
Diversification Opportunities for PKSHA TECHNOLOGY and Hyundai
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PKSHA and Hyundai is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and PKSHA 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 PKSHA TECHNOLOGY INC 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 PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and Hyundai go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and Hyundai
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 1.41 times more return on investment than Hyundai. However, PKSHA TECHNOLOGY is 1.41 times more volatile than Hyundai Motor. It trades about 0.29 of its potential returns per unit of risk. Hyundai Motor is currently generating about -0.02 per unit of risk. If you would invest 2,100 in PKSHA TECHNOLOGY INC on September 2, 2024 and sell it today you would earn a total of 500.00 from holding PKSHA TECHNOLOGY INC or generate 23.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. Hyundai Motor
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| Hyundai Motor |
PKSHA TECHNOLOGY and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and Hyundai
The main advantage of trading using opposite PKSHA TECHNOLOGY and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA 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.| PKSHA TECHNOLOGY vs. Microsoft | PKSHA TECHNOLOGY vs. Superior Plus Corp | PKSHA TECHNOLOGY vs. NMI Holdings | PKSHA TECHNOLOGY vs. Origin Agritech |
| Hyundai vs. NEWELL RUBBERMAID | Hyundai vs. Materialise NV | Hyundai vs. Martin Marietta Materials | Hyundai vs. APPLIED MATERIALS |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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