Correlation Between Hyundai and Norfolk Southern
Can any of the company-specific risk be diversified away by investing in both Hyundai and Norfolk Southern 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 Norfolk Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Norfolk Southern, you can compare the effects of market volatilities on Hyundai and Norfolk Southern 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 Norfolk Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Norfolk Southern.
Diversification Opportunities for Hyundai and Norfolk Southern
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hyundai and Norfolk is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Norfolk Southern in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norfolk Southern 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 Norfolk Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norfolk Southern has no effect on the direction of Hyundai i.e., Hyundai and Norfolk Southern go up and down completely randomly.
Pair Corralation between Hyundai and Norfolk Southern
Assuming the 90 days horizon Hyundai Motor is expected to under-perform the Norfolk Southern. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Motor is 1.15 times less risky than Norfolk Southern. The stock trades about -0.07 of its potential returns per unit of risk. The Norfolk Southern is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 22,071 in Norfolk Southern on September 3, 2024 and sell it today you would earn a total of 3,929 from holding Norfolk Southern or generate 17.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Norfolk Southern
Performance |
| Timeline |
| Hyundai Motor |
| Norfolk Southern |
Hyundai and Norfolk Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Norfolk Southern
The main advantage of trading using opposite Hyundai and Norfolk Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Norfolk Southern 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 Norfolk Southern will offset losses from the drop in Norfolk Southern's long position.| Hyundai vs. HK Electric Investments | Hyundai vs. Pebblebrook Hotel Trust | Hyundai vs. NH HOTEL GROUP | Hyundai vs. Apollo Investment Corp |
| Norfolk Southern vs. Superior Plus Corp | Norfolk Southern vs. NMI Holdings | Norfolk Southern vs. Origin Agritech | Norfolk Southern vs. SIVERS SEMICONDUCTORS AB |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |