Correlation Between Hyundai and Retail Estates
Can any of the company-specific risk be diversified away by investing in both Hyundai and Retail Estates 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 Retail Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Retail Estates NV, you can compare the effects of market volatilities on Hyundai and Retail Estates 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 Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Retail Estates.
Diversification Opportunities for Hyundai and Retail Estates
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hyundai and Retail is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates 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 Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of Hyundai i.e., Hyundai and Retail Estates go up and down completely randomly.
Pair Corralation between Hyundai and Retail Estates
Assuming the 90 days trading horizon Hyundai is expected to generate 1.02 times less return on investment than Retail Estates. But when comparing it to its historical volatility, Hyundai Motor is 1.71 times less risky than Retail Estates. It trades about 0.08 of its potential returns per unit of risk. Retail Estates NV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,196 in Retail Estates NV on August 29, 2024 and sell it today you would earn a total of 2,014 from holding Retail Estates NV or generate 38.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.63% |
| Values | Daily Returns |
Hyundai Motor vs. Retail Estates NV
Performance |
| Timeline |
| Hyundai Motor |
| Retail Estates NV |
Hyundai and Retail Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Retail Estates
The main advantage of trading using opposite Hyundai and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' long position.| Hyundai vs. Ondine Biomedical | Hyundai vs. Europa Metals | Hyundai vs. Lendinvest PLC | Hyundai vs. Neometals |
| Retail Estates vs. Lendinvest PLC | Retail Estates vs. Neometals | Retail Estates vs. Coor Service Management | Retail Estates vs. Albion Technology General |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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