Correlation Between DG Innovate and Hyundai
Can any of the company-specific risk be diversified away by investing in both DG Innovate 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 DG Innovate and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DG Innovate PLC and Hyundai Motor, you can compare the effects of market volatilities on DG Innovate 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 DG Innovate with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of DG Innovate and Hyundai.
Diversification Opportunities for DG Innovate and Hyundai
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DGI and Hyundai is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding DG Innovate PLC and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and DG Innovate 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 DG Innovate PLC 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 DG Innovate i.e., DG Innovate and Hyundai go up and down completely randomly.
Pair Corralation between DG Innovate and Hyundai
Assuming the 90 days trading horizon DG Innovate PLC is expected to generate 3.92 times more return on investment than Hyundai. However, DG Innovate is 3.92 times more volatile than Hyundai Motor. It trades about 0.06 of its potential returns per unit of risk. Hyundai Motor is currently generating about -0.21 per unit of risk. If you would invest 8.00 in DG Innovate PLC on September 18, 2024 and sell it today you would earn a total of 0.30 from holding DG Innovate PLC or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DG Innovate PLC vs. Hyundai Motor
Performance |
| Timeline |
| DG Innovate PLC |
| Hyundai Motor |
DG Innovate and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DG Innovate and Hyundai
The main advantage of trading using opposite DG Innovate and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DG Innovate 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.| DG Innovate vs. Quadrise Plc | DG Innovate vs. ImmuPharma PLC | DG Innovate vs. Intuitive Investments Group | DG Innovate vs. European Metals Holdings |
| Hyundai vs. Ameriprise Financial | Hyundai vs. Cembra Money Bank | Hyundai vs. Sparebank 1 SR | Hyundai vs. InterContinental Hotels Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |