Correlation Between Guaranty Trust and Hyundai
Can any of the company-specific risk be diversified away by investing in both Guaranty Trust 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 Guaranty Trust and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guaranty Trust Holding and Hyundai Motor, you can compare the effects of market volatilities on Guaranty Trust 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 Guaranty Trust with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guaranty Trust and Hyundai.
Diversification Opportunities for Guaranty Trust and Hyundai
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guaranty and Hyundai is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Guaranty Trust Holding and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Guaranty Trust 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 Guaranty Trust Holding 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 Guaranty Trust i.e., Guaranty Trust and Hyundai go up and down completely randomly.
Pair Corralation between Guaranty Trust and Hyundai
Assuming the 90 days trading horizon Guaranty Trust Holding is expected to generate 0.68 times more return on investment than Hyundai. However, Guaranty Trust Holding is 1.48 times less risky than Hyundai. It trades about 0.19 of its potential returns per unit of risk. Hyundai Motor is currently generating about 0.0 per unit of risk. If you would invest 172.00 in Guaranty Trust Holding on September 1, 2024 and sell it today you would earn a total of 13.00 from holding Guaranty Trust Holding or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guaranty Trust Holding vs. Hyundai Motor
Performance |
| Timeline |
| Guaranty Trust Holding |
| Hyundai Motor |
Guaranty Trust and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guaranty Trust and Hyundai
The main advantage of trading using opposite Guaranty Trust and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guaranty Trust 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.| Guaranty Trust vs. Aeorema Communications Plc | Guaranty Trust vs. Cairo Communication SpA | Guaranty Trust vs. Take Two Interactive Software | Guaranty Trust vs. Impax Asset Management |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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