Correlation Between Dow Jones and Hyundai
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By analyzing existing cross correlation between Dow Jones Industrial and Hyundai Capital America, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Hyundai.
Diversification Opportunities for Dow Jones and Hyundai
Very weak diversification
The 3 months correlation between Dow and Hyundai is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Hyundai Capital America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Capital America and Dow Jones 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 Dow Jones Industrial 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 Capital America has no effect on the direction of Dow Jones i.e., Dow Jones and Hyundai go up and down completely randomly.
Pair Corralation between Dow Jones and Hyundai
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.5 times more return on investment than Hyundai. However, Dow Jones is 1.5 times more volatile than Hyundai Capital America. It trades about 0.08 of its potential returns per unit of risk. Hyundai Capital America is currently generating about 0.01 per unit of risk. If you would invest 3,418,997 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 1,072,068 from holding Dow Jones Industrial or generate 31.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 36.63% |
| Values | Daily Returns |
Dow Jones Industrial vs. Hyundai Capital America
Performance |
| Timeline |
Dow Jones and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Hyundai Capital America
Pair trading matchups for Hyundai
Pair Trading with Dow Jones and Hyundai
The main advantage of trading using opposite Dow Jones and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Hyundai vs. AEP TEX INC | Hyundai vs. US BANK NATIONAL | Hyundai vs. MetLife | Hyundai vs. Brera Holdings PLC |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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