Correlation Between Hyundai and KOOL2PLAY
Can any of the company-specific risk be diversified away by investing in both Hyundai and KOOL2PLAY 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 KOOL2PLAY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and KOOL2PLAY SA ZY, you can compare the effects of market volatilities on Hyundai and KOOL2PLAY 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 KOOL2PLAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and KOOL2PLAY.
Diversification Opportunities for Hyundai and KOOL2PLAY
Poor diversification
The 3 months correlation between Hyundai and KOOL2PLAY is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and KOOL2PLAY SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOOL2PLAY SA ZY 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 are associated (or correlated) with KOOL2PLAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOOL2PLAY SA ZY has no effect on the direction of Hyundai i.e., Hyundai and KOOL2PLAY go up and down completely randomly.
Pair Corralation between Hyundai and KOOL2PLAY
Assuming the 90 days horizon Hyundai Motor is expected to generate 0.35 times more return on investment than KOOL2PLAY. However, Hyundai Motor is 2.83 times less risky than KOOL2PLAY. It trades about 0.06 of its potential returns per unit of risk. KOOL2PLAY SA ZY is currently generating about -0.05 per unit of risk. If you would invest 3,370 in Hyundai Motor on August 31, 2024 and sell it today you would earn a total of 1,830 from holding Hyundai Motor or generate 54.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. KOOL2PLAY SA ZY
Performance |
| Timeline |
| Hyundai Motor |
| KOOL2PLAY SA ZY |
Hyundai and KOOL2PLAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and KOOL2PLAY
The main advantage of trading using opposite Hyundai and KOOL2PLAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, KOOL2PLAY 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 KOOL2PLAY will offset losses from the drop in KOOL2PLAY's long position.| Hyundai vs. Fast Retailing Co | Hyundai vs. Retail Estates NV | Hyundai vs. Vishay Intertechnology | Hyundai vs. Micron Technology |
| KOOL2PLAY vs. Nintendo Co | KOOL2PLAY vs. Sea Limited | KOOL2PLAY vs. Take Two Interactive Software | KOOL2PLAY vs. Superior Plus Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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