Correlation Between Hyundai and St James’s
Can any of the company-specific risk be diversified away by investing in both Hyundai and St James’s 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 St James’s into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and St Jamess Place, you can compare the effects of market volatilities on Hyundai and St James’s 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 St James’s. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and St James’s.
Diversification Opportunities for Hyundai and St James’s
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and 1IV is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and St Jamess Place in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Jamess Place 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 St James’s. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Jamess Place has no effect on the direction of Hyundai i.e., Hyundai and St James’s go up and down completely randomly.
Pair Corralation between Hyundai and St James’s
If you would invest 4,940 in Hyundai Motor on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Hyundai Motor or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
Hyundai Motor vs. St Jamess Place
Performance |
| Timeline |
| Hyundai Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| St Jamess Place |
Hyundai and St James’s Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and St James’s
The main advantage of trading using opposite Hyundai and St James’s positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, St James’s 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 St James’s will offset losses from the drop in St James’s' long position.The idea behind Hyundai Motor and St Jamess Place pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| St James’s vs. PLANETREE INTLDEVHD 10 | St James’s vs. BioNTech SE | St James’s vs. Granite Construction | St James’s vs. DocCheck AG |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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