Correlation Between Hyundai and AstraZeneca PLC
Can any of the company-specific risk be diversified away by investing in both Hyundai and AstraZeneca PLC 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 AstraZeneca PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and AstraZeneca PLC, you can compare the effects of market volatilities on Hyundai and AstraZeneca PLC 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 AstraZeneca PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and AstraZeneca PLC.
Diversification Opportunities for Hyundai and AstraZeneca PLC
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and AstraZeneca is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and AstraZeneca PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstraZeneca PLC 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 AstraZeneca PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstraZeneca PLC has no effect on the direction of Hyundai i.e., Hyundai and AstraZeneca PLC go up and down completely randomly.
Pair Corralation between Hyundai and AstraZeneca PLC
Assuming the 90 days horizon Hyundai Motor is expected to generate 0.96 times more return on investment than AstraZeneca PLC. However, Hyundai Motor is 1.05 times less risky than AstraZeneca PLC. It trades about -0.02 of its potential returns per unit of risk. AstraZeneca PLC is currently generating about -0.04 per unit of risk. If you would invest 5,280 in Hyundai Motor on September 3, 2024 and sell it today you would lose (80.00) from holding Hyundai Motor or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. AstraZeneca PLC
Performance |
| Timeline |
| Hyundai Motor |
| AstraZeneca PLC |
Hyundai and AstraZeneca PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and AstraZeneca PLC
The main advantage of trading using opposite Hyundai and AstraZeneca PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, AstraZeneca PLC 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 AstraZeneca PLC will offset losses from the drop in AstraZeneca PLC's long position.| Hyundai vs. HK Electric Investments | Hyundai vs. Pebblebrook Hotel Trust | Hyundai vs. NH HOTEL GROUP | Hyundai vs. Apollo Investment Corp |
| AstraZeneca PLC vs. Eli Lilly and | AstraZeneca PLC vs. AbbVie Inc | AstraZeneca PLC vs. Pfizer Inc | AstraZeneca PLC 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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