Correlation Between Ford and Hyundai Home
Can any of the company-specific risk be diversified away by investing in both Ford and Hyundai Home 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 Ford and Hyundai Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Hyundai Home Shopping, you can compare the effects of market volatilities on Ford and Hyundai Home 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 Ford with a short position of Hyundai Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Hyundai Home.
Diversification Opportunities for Ford and Hyundai Home
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ford and Hyundai is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Hyundai Home Shopping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Home Shopping and Ford 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 Ford Motor are associated (or correlated) with Hyundai Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Home Shopping has no effect on the direction of Ford i.e., Ford and Hyundai Home go up and down completely randomly.
Pair Corralation between Ford and Hyundai Home
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.64 times more return on investment than Hyundai Home. However, Ford is 1.64 times more volatile than Hyundai Home Shopping. It trades about -0.02 of its potential returns per unit of risk. Hyundai Home Shopping is currently generating about -0.11 per unit of risk. If you would invest 1,287 in Ford Motor on September 3, 2024 and sell it today you would lose (174.00) from holding Ford Motor or give up 13.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.78% |
| Values | Daily Returns |
Ford Motor vs. Hyundai Home Shopping
Performance |
| Timeline |
| Ford Motor |
| Hyundai Home Shopping |
Ford and Hyundai Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Hyundai Home
The main advantage of trading using opposite Ford and Hyundai Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Hyundai Home 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 Home will offset losses from the drop in Hyundai Home's long position.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Hyundai Home vs. Nice Information Telecommunication | Hyundai Home vs. Hanmi Semiconductor Co | Hyundai Home vs. Youngsin Metal Industrial | Hyundai Home vs. Daedong Metals Co |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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