Correlation Between Hyundai and BankUnited
Can any of the company-specific risk be diversified away by investing in both Hyundai and BankUnited 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 BankUnited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and BankUnited, you can compare the effects of market volatilities on Hyundai and BankUnited 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 BankUnited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and BankUnited.
Diversification Opportunities for Hyundai and BankUnited
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and BankUnited is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and BankUnited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankUnited 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 BankUnited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankUnited has no effect on the direction of Hyundai i.e., Hyundai and BankUnited go up and down completely randomly.
Pair Corralation between Hyundai and BankUnited
Assuming the 90 days horizon Hyundai is expected to generate 1.6 times less return on investment than BankUnited. But when comparing it to its historical volatility, Hyundai Motor is 1.04 times less risky than BankUnited. It trades about 0.06 of its potential returns per unit of risk. BankUnited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,928 in BankUnited on September 2, 2024 and sell it today you would earn a total of 2,052 from holding BankUnited or generate 106.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. BankUnited
Performance |
| Timeline |
| Hyundai Motor |
| BankUnited |
Hyundai and BankUnited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and BankUnited
The main advantage of trading using opposite Hyundai and BankUnited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, BankUnited 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 BankUnited will offset losses from the drop in BankUnited's long position.| Hyundai vs. NEWELL RUBBERMAID | Hyundai vs. Materialise NV | Hyundai vs. Martin Marietta Materials | Hyundai vs. APPLIED MATERIALS |
| BankUnited vs. SBA Communications Corp | BankUnited vs. AUSTEVOLL SEAFOOD | BankUnited vs. ULTRA CLEAN HLDGS | BankUnited vs. TYSON FOODS A |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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