Correlation Between Hyundai and UNIQA Insurance
Can any of the company-specific risk be diversified away by investing in both Hyundai and UNIQA Insurance 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 UNIQA Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and UNIQA Insurance Group, you can compare the effects of market volatilities on Hyundai and UNIQA Insurance 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 UNIQA Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and UNIQA Insurance.
Diversification Opportunities for Hyundai and UNIQA Insurance
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and UNIQA is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and UNIQA Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIQA Insurance Group 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 UNIQA Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIQA Insurance Group has no effect on the direction of Hyundai i.e., Hyundai and UNIQA Insurance go up and down completely randomly.
Pair Corralation between Hyundai and UNIQA Insurance
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the UNIQA Insurance. In addition to that, Hyundai is 3.25 times more volatile than UNIQA Insurance Group. It trades about -0.15 of its total potential returns per unit of risk. UNIQA Insurance Group is currently generating about -0.03 per unit of volatility. If you would invest 746.00 in UNIQA Insurance Group on August 25, 2024 and sell it today you would lose (9.00) from holding UNIQA Insurance Group or give up 1.21% 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. UNIQA Insurance Group
Performance |
| Timeline |
| Hyundai Motor |
| UNIQA Insurance Group |
Hyundai and UNIQA Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and UNIQA Insurance
The main advantage of trading using opposite Hyundai and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, UNIQA Insurance 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 UNIQA Insurance will offset losses from the drop in UNIQA Insurance's long position.| Hyundai vs. Vitec Software Group | Hyundai vs. Take Two Interactive Software | Hyundai vs. Planet Fitness Cl | Hyundai vs. Optima Health plc |
| UNIQA Insurance vs. Samsung Electronics Co | UNIQA Insurance vs. Samsung Electronics Co | UNIQA Insurance vs. Hyundai Motor | UNIQA Insurance vs. Toyota Motor 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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