Correlation Between Hyundai and Hexo Corp
Can any of the company-specific risk be diversified away by investing in both Hyundai and Hexo Corp 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 Hexo Corp 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 Hexo Corp, you can compare the effects of market volatilities on Hyundai and Hexo Corp 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 Hexo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Hexo Corp.
Diversification Opportunities for Hyundai and Hexo Corp
Very poor diversification
The 3 months correlation between Hyundai and Hexo is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Hexo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexo Corp 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 Hexo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexo Corp has no effect on the direction of Hyundai i.e., Hyundai and Hexo Corp go up and down completely randomly.
Pair Corralation between Hyundai and Hexo Corp
Assuming the 90 days horizon Hyundai Motor Co is expected to generate 0.36 times more return on investment than Hexo Corp. However, Hyundai Motor Co is 2.77 times less risky than Hexo Corp. It trades about 0.07 of its potential returns per unit of risk. Hexo Corp is currently generating about -0.09 per unit of risk. If you would invest 2,739 in Hyundai Motor Co on August 28, 2024 and sell it today you would earn a total of 2,736 from holding Hyundai Motor Co or generate 99.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 28.28% |
| Values | Daily Returns |
Hyundai Motor Co vs. Hexo Corp
Performance |
| Timeline |
| Hyundai Motor |
| Hexo Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hyundai and Hexo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Hexo Corp
The main advantage of trading using opposite Hyundai and Hexo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Hexo Corp 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 Hexo Corp will offset losses from the drop in Hexo Corp's long position.| Hyundai vs. Isuzu Motors | Hyundai vs. Renault SA | Hyundai vs. Toyota Motor Corp | Hyundai vs. Porsche Automobile Holding |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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