Correlation Between Hyundai and AVROBIO
Can any of the company-specific risk be diversified away by investing in both Hyundai and AVROBIO 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 AVROBIO 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 AVROBIO, you can compare the effects of market volatilities on Hyundai and AVROBIO 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 AVROBIO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and AVROBIO.
Diversification Opportunities for Hyundai and AVROBIO
Pay attention - limited upside
The 3 months correlation between Hyundai and AVROBIO is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and AVROBIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVROBIO 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 AVROBIO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVROBIO has no effect on the direction of Hyundai i.e., Hyundai and AVROBIO go up and down completely randomly.
Pair Corralation between Hyundai and AVROBIO
Assuming the 90 days horizon Hyundai is expected to generate 2.19 times less return on investment than AVROBIO. But when comparing it to its historical volatility, Hyundai Motor Co is 3.28 times less risky than AVROBIO. It trades about 0.07 of its potential returns per unit of risk. AVROBIO is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 79.00 in AVROBIO on August 30, 2024 and sell it today you would earn a total of 61.00 from holding AVROBIO or generate 77.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 77.58% |
| Values | Daily Returns |
Hyundai Motor Co vs. AVROBIO
Performance |
| Timeline |
| Hyundai Motor |
| AVROBIO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hyundai and AVROBIO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and AVROBIO
The main advantage of trading using opposite Hyundai and AVROBIO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, AVROBIO 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 AVROBIO will offset losses from the drop in AVROBIO's long position.The idea behind Hyundai Motor Co and AVROBIO pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AVROBIO vs. Ocean Biomedical | AVROBIO vs. Enveric Biosciences | AVROBIO vs. Elevation Oncology | AVROBIO vs. Zura Bio Limited |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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