Correlation Between Hyundai and Toray Industries
Can any of the company-specific risk be diversified away by investing in both Hyundai and Toray Industries 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 Toray Industries 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 Toray Industries, you can compare the effects of market volatilities on Hyundai and Toray Industries 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 Toray Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Toray Industries.
Diversification Opportunities for Hyundai and Toray Industries
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hyundai and Toray is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Toray Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toray Industries 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 Toray Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toray Industries has no effect on the direction of Hyundai i.e., Hyundai and Toray Industries go up and down completely randomly.
Pair Corralation between Hyundai and Toray Industries
Assuming the 90 days horizon Hyundai Motor Co is expected to under-perform the Toray Industries. In addition to that, Hyundai is 1.66 times more volatile than Toray Industries. It trades about -0.24 of its total potential returns per unit of risk. Toray Industries is currently generating about 0.28 per unit of volatility. If you would invest 533.00 in Toray Industries on August 28, 2024 and sell it today you would earn a total of 27.00 from holding Toray Industries or generate 5.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Toray Industries
Performance |
| Timeline |
| Hyundai Motor |
| Toray Industries |
Hyundai and Toray Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Toray Industries
The main advantage of trading using opposite Hyundai and Toray Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Toray Industries 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 Toray Industries will offset losses from the drop in Toray Industries' long position.| Hyundai vs. Isuzu Motors | Hyundai vs. Renault SA | Hyundai vs. Toyota Motor Corp | Hyundai vs. Porsche Automobile Holding |
| Toray Industries vs. Unifi Inc | Toray Industries vs. Albany International | Toray Industries vs. Sumitomo Electric Industries | Toray Industries vs. Sekisui House |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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