Correlation Between Hyundai and Impala Platinum
Can any of the company-specific risk be diversified away by investing in both Hyundai and Impala Platinum 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 Impala Platinum 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 Impala Platinum Holdings, you can compare the effects of market volatilities on Hyundai and Impala Platinum 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 Impala Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Impala Platinum.
Diversification Opportunities for Hyundai and Impala Platinum
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and Impala is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Impala Platinum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impala Platinum Holdings 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 Impala Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impala Platinum Holdings has no effect on the direction of Hyundai i.e., Hyundai and Impala Platinum go up and down completely randomly.
Pair Corralation between Hyundai and Impala Platinum
Assuming the 90 days horizon Hyundai Motor Co is expected to generate 0.52 times more return on investment than Impala Platinum. However, Hyundai Motor Co is 1.92 times less risky than Impala Platinum. It trades about -0.05 of its potential returns per unit of risk. Impala Platinum Holdings is currently generating about -0.2 per unit of risk. If you would invest 5,834 in Hyundai Motor Co on August 31, 2024 and sell it today you would lose (134.00) from holding Hyundai Motor Co or give up 2.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Impala Platinum Holdings
Performance |
| Timeline |
| Hyundai Motor |
| Impala Platinum Holdings |
Hyundai and Impala Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Impala Platinum
The main advantage of trading using opposite Hyundai and Impala Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Impala Platinum 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 Impala Platinum will offset losses from the drop in Impala Platinum's long position.The idea behind Hyundai Motor Co and Impala Platinum Holdings 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.| Impala Platinum vs. Anglo American Platinum | Impala Platinum vs. Sibanye Gold Ltd | Impala Platinum vs. Anglo American PLC | Impala Platinum vs. Fortescue Metals Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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