Correlation Between Hyundai and Adaptimmune Therapeutics
Can any of the company-specific risk be diversified away by investing in both Hyundai and Adaptimmune Therapeutics 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 Hyundai and Adaptimmune Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor Co and Adaptimmune Therapeutics Plc, you can compare the effects of market volatilities on Hyundai and Adaptimmune Therapeutics 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 Hyundai with a short position of Adaptimmune Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Adaptimmune Therapeutics.
Diversification Opportunities for Hyundai and Adaptimmune Therapeutics
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Adaptimmune is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Adaptimmune Therapeutics Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptimmune Therapeutics and Hyundai 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 Hyundai Motor Co are associated (or correlated) with Adaptimmune Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptimmune Therapeutics has no effect on the direction of Hyundai i.e., Hyundai and Adaptimmune Therapeutics go up and down completely randomly.
Pair Corralation between Hyundai and Adaptimmune Therapeutics
Assuming the 90 days horizon Hyundai Motor Co is expected to generate 0.44 times more return on investment than Adaptimmune Therapeutics. However, Hyundai Motor Co is 2.25 times less risky than Adaptimmune Therapeutics. It trades about 0.07 of its potential returns per unit of risk. Adaptimmune Therapeutics Plc is currently generating about -0.01 per unit of risk. If you would invest 2,771 in Hyundai Motor Co on August 27, 2024 and sell it today you would earn a total of 2,742 from holding Hyundai Motor Co or generate 98.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Adaptimmune Therapeutics Plc
Performance |
| Timeline |
| Hyundai Motor |
| Adaptimmune Therapeutics |
Hyundai and Adaptimmune Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Adaptimmune Therapeutics
The main advantage of trading using opposite Hyundai and Adaptimmune Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Adaptimmune Therapeutics 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 Adaptimmune Therapeutics will offset losses from the drop in Adaptimmune Therapeutics' long position.| Hyundai vs. Isuzu Motors | Hyundai vs. Renault SA | Hyundai vs. Toyota Motor Corp | Hyundai vs. Porsche Automobile Holding |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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