Correlation Between Hyundai and Energy Revenue
Can any of the company-specific risk be diversified away by investing in both Hyundai and Energy Revenue 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 Energy Revenue 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 Energy Revenue Amer, you can compare the effects of market volatilities on Hyundai and Energy Revenue 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 Energy Revenue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Energy Revenue.
Diversification Opportunities for Hyundai and Energy Revenue
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and Energy is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Energy Revenue Amer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Revenue Amer 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 Energy Revenue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Revenue Amer has no effect on the direction of Hyundai i.e., Hyundai and Energy Revenue go up and down completely randomly.
Pair Corralation between Hyundai and Energy Revenue
Assuming the 90 days horizon Hyundai Motor Co is expected to generate 0.26 times more return on investment than Energy Revenue. However, Hyundai Motor Co is 3.83 times less risky than Energy Revenue. It trades about 0.01 of its potential returns per unit of risk. Energy Revenue Amer is currently generating about -0.36 per unit of risk. If you would invest 5,400 in Hyundai Motor Co on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Hyundai Motor Co or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Energy Revenue Amer
Performance |
| Timeline |
| Hyundai Motor |
| Energy Revenue Amer |
Hyundai and Energy Revenue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Energy Revenue
The main advantage of trading using opposite Hyundai and Energy Revenue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Energy Revenue 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 Energy Revenue will offset losses from the drop in Energy Revenue's long position.| Hyundai vs. Volkswagen AG 110 | Hyundai vs. Porsche Automobil Holding | Hyundai vs. Ferrari NV | Hyundai vs. Porsche Automobile Holding |
| Energy Revenue vs. Gulfport Energy Operating | Energy Revenue vs. Magnolia Oil Gas | Energy Revenue vs. Vital Energy | Energy Revenue vs. Texas Pacific Land |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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