Correlation Between Hyundai and Xilio Development
Can any of the company-specific risk be diversified away by investing in both Hyundai and Xilio Development 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 Xilio Development 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 Xilio Development, you can compare the effects of market volatilities on Hyundai and Xilio Development 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 Xilio Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Xilio Development.
Diversification Opportunities for Hyundai and Xilio Development
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Xilio is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Xilio Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xilio Development 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 Xilio Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xilio Development has no effect on the direction of Hyundai i.e., Hyundai and Xilio Development go up and down completely randomly.
Pair Corralation between Hyundai and Xilio Development
Assuming the 90 days horizon Hyundai Motor Co is expected to under-perform the Xilio Development. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hyundai Motor Co is 5.61 times less risky than Xilio Development. The pink sheet trades about -0.25 of its potential returns per unit of risk. The Xilio Development is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 86.00 in Xilio Development on August 24, 2024 and sell it today you would earn a total of 6.00 from holding Xilio Development or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hyundai Motor Co vs. Xilio Development
Performance |
| Timeline |
| Hyundai Motor |
| Xilio Development |
Hyundai and Xilio Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Xilio Development
The main advantage of trading using opposite Hyundai and Xilio Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Xilio Development 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 Xilio Development will offset losses from the drop in Xilio Development's long position.The idea behind Hyundai Motor Co and Xilio Development 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.| Xilio Development vs. Lyra Therapeutics | Xilio Development vs. Hookipa Pharma | Xilio Development vs. Cingulate Warrants | Xilio Development vs. SAB Biotherapeutics |
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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