Correlation Between Hyundai and China Resources
Can any of the company-specific risk be diversified away by investing in both Hyundai and China Resources 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 China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and China Resources Power, you can compare the effects of market volatilities on Hyundai and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and China Resources.
Diversification Opportunities for Hyundai and China Resources
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and China is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and China Resources Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Power 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Power has no effect on the direction of Hyundai i.e., Hyundai and China Resources go up and down completely randomly.
Pair Corralation between Hyundai and China Resources
Assuming the 90 days horizon Hyundai Motor is expected to under-perform the China Resources. In addition to that, Hyundai is 1.16 times more volatile than China Resources Power. It trades about -0.18 of its total potential returns per unit of risk. China Resources Power is currently generating about -0.11 per unit of volatility. If you would invest 242.00 in China Resources Power on October 14, 2024 and sell it today you would lose (30.00) from holding China Resources Power or give up 12.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.97% |
| Values | Daily Returns |
Hyundai Motor vs. China Resources Power
Performance |
| Timeline |
| Hyundai Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Resources Power |
Hyundai and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and China Resources
The main advantage of trading using opposite Hyundai and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Hyundai vs. JAPAN AIRLINES | Hyundai vs. ONWARD MEDICAL BV | Hyundai vs. Advanced Medical Solutions | Hyundai vs. Genertec Universal Medical |
| China Resources vs. Air Lease | China Resources vs. Lamar Advertising | China Resources vs. Luckin Coffee | China Resources vs. Lendlease 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |