Correlation Between Hyundai and Enbridge
Can any of the company-specific risk be diversified away by investing in both Hyundai and Enbridge 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 Enbridge 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 Enbridge, you can compare the effects of market volatilities on Hyundai and Enbridge 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 Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Enbridge.
Diversification Opportunities for Hyundai and Enbridge
Very good diversification
The 3 months correlation between Hyundai and Enbridge is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge 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 Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Hyundai i.e., Hyundai and Enbridge go up and down completely randomly.
Pair Corralation between Hyundai and Enbridge
Assuming the 90 days horizon Hyundai Motor Co is expected to under-perform the Enbridge. In addition to that, Hyundai is 3.22 times more volatile than Enbridge. It trades about -0.1 of its total potential returns per unit of risk. Enbridge is currently generating about 0.15 per unit of volatility. If you would invest 2,076 in Enbridge on September 12, 2024 and sell it today you would earn a total of 146.00 from holding Enbridge or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Hyundai Motor Co vs. Enbridge
Performance |
| Timeline |
| Hyundai Motor |
| Enbridge |
Hyundai and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Enbridge
The main advantage of trading using opposite Hyundai and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Enbridge 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 Enbridge will offset losses from the drop in Enbridge's long position.| Hyundai vs. Volkswagen AG 110 | Hyundai vs. Porsche Automobil Holding | Hyundai vs. Ferrari NV | Hyundai vs. Bayerische Motoren Werke |
| Enbridge vs. GasLog Partners LP | Enbridge vs. GasLog Partners LP | Enbridge vs. NGL Energy Partners | Enbridge vs. Seapeak LLC |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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