Correlation Between Hyundai and Wolters Kluwer
Can any of the company-specific risk be diversified away by investing in both Hyundai and Wolters Kluwer 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 Wolters Kluwer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Wolters Kluwer NV, you can compare the effects of market volatilities on Hyundai and Wolters Kluwer 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 Wolters Kluwer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Wolters Kluwer.
Diversification Opportunities for Hyundai and Wolters Kluwer
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and Wolters is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Wolters Kluwer NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wolters Kluwer NV 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 Wolters Kluwer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wolters Kluwer NV has no effect on the direction of Hyundai i.e., Hyundai and Wolters Kluwer go up and down completely randomly.
Pair Corralation between Hyundai and Wolters Kluwer
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 1.61 times more return on investment than Wolters Kluwer. However, Hyundai is 1.61 times more volatile than Wolters Kluwer NV. It trades about 0.86 of its potential returns per unit of risk. Wolters Kluwer NV is currently generating about 0.08 per unit of risk. If you would invest 4,700 in Hyundai Motor on October 15, 2024 and sell it today you would earn a total of 240.00 from holding Hyundai Motor or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 25.0% |
| Values | Daily Returns |
Hyundai Motor vs. Wolters Kluwer NV
Performance |
| Timeline |
| Hyundai Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Wolters Kluwer NV |
Hyundai and Wolters Kluwer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Wolters Kluwer
The main advantage of trading using opposite Hyundai and Wolters Kluwer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Wolters Kluwer 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 Wolters Kluwer will offset losses from the drop in Wolters Kluwer's long position.| Hyundai vs. X FAB Silicon Foundries | Hyundai vs. Tradegate AG Wertpapierhandelsbank | Hyundai vs. Silicon Motion Technology | Hyundai vs. Mitsubishi Gas Chemical |
| Wolters Kluwer vs. American Airlines Group | Wolters Kluwer vs. LANDSEA GREEN MANAGEMENT | Wolters Kluwer vs. China Eastern Airlines | Wolters Kluwer vs. Corporate Travel Management |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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