Correlation Between Hyundai and Deutsche Post
Can any of the company-specific risk be diversified away by investing in both Hyundai and Deutsche Post 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 Deutsche Post into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Deutsche Post AG, you can compare the effects of market volatilities on Hyundai and Deutsche Post 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 Deutsche Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Deutsche Post.
Diversification Opportunities for Hyundai and Deutsche Post
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hyundai and Deutsche is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Deutsche Post AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Post AG 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 Deutsche Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Post AG has no effect on the direction of Hyundai i.e., Hyundai and Deutsche Post go up and down completely randomly.
Pair Corralation between Hyundai and Deutsche Post
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 1.4 times more return on investment than Deutsche Post. However, Hyundai is 1.4 times more volatile than Deutsche Post AG. It trades about -0.1 of its potential returns per unit of risk. Deutsche Post AG is currently generating about -0.16 per unit of risk. If you would invest 5,860 in Hyundai Motor on August 26, 2024 and sell it today you would lose (360.00) from holding Hyundai Motor or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Deutsche Post AG
Performance |
| Timeline |
| Hyundai Motor |
| Deutsche Post AG |
Hyundai and Deutsche Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Deutsche Post
The main advantage of trading using opposite Hyundai and Deutsche Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Deutsche Post 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 Deutsche Post will offset losses from the drop in Deutsche Post's long position.| Hyundai vs. MG Plc | Hyundai vs. Admiral Group PLC | Hyundai vs. Anglo American PLC | Hyundai vs. Vodafone Group PLC |
| Deutsche Post vs. Samsung Electronics Co | Deutsche Post vs. Samsung Electronics Co | Deutsche Post vs. Hyundai Motor | Deutsche Post 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 Stocks Directory module to find actively traded stocks across global markets.
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