Correlation Between Apple and Hyundai
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Hyundai Motor, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Hyundai.
Diversification Opportunities for Apple and Hyundai
Very good diversification
The 3 months correlation between Apple and Hyundai is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Apple 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 Apple 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 Apple i.e., Apple and Hyundai go up and down completely randomly.
Pair Corralation between Apple and Hyundai
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.54 times more return on investment than Hyundai. However, Apple Inc is 1.86 times less risky than Hyundai. It trades about 0.36 of its potential returns per unit of risk. Hyundai Motor is currently generating about 0.02 per unit of risk. If you would invest 20,575 in Apple Inc on September 1, 2024 and sell it today you would earn a total of 1,860 from holding Apple Inc or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Apple Inc vs. Hyundai Motor
Performance |
| Timeline |
| Apple Inc |
| Hyundai Motor |
Apple and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Hyundai
The main advantage of trading using opposite Apple and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. Enter Air SA | Apple vs. Wayside Technology Group | Apple vs. DELTA AIR LINES | Apple vs. Align Technology |
| Hyundai vs. Suntory Beverage Food | Hyundai vs. Games Workshop Group | Hyundai vs. Thai Beverage Public | Hyundai vs. TSOGO SUN GAMING |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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