Correlation Between Hyundai and Air Products
Can any of the company-specific risk be diversified away by investing in both Hyundai and Air Products 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 Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Air Products Chemicals, you can compare the effects of market volatilities on Hyundai and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Air Products.
Diversification Opportunities for Hyundai and Air Products
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and Air is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Air Products Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products Chemicals 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products Chemicals has no effect on the direction of Hyundai i.e., Hyundai and Air Products go up and down completely randomly.
Pair Corralation between Hyundai and Air Products
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 0.44 times more return on investment than Air Products. However, Hyundai Motor is 2.29 times less risky than Air Products. It trades about 0.08 of its potential returns per unit of risk. Air Products Chemicals is currently generating about 0.03 per unit of risk. If you would invest 2,505 in Hyundai Motor on August 25, 2024 and sell it today you would earn a total of 2,995 from holding Hyundai Motor or generate 119.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hyundai Motor vs. Air Products Chemicals
Performance |
| Timeline |
| Hyundai Motor |
| Air Products Chemicals |
Hyundai and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Air Products
The main advantage of trading using opposite Hyundai and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| Hyundai vs. Vitec Software Group | Hyundai vs. Take Two Interactive Software | Hyundai vs. Planet Fitness Cl | Hyundai vs. Optima Health plc |
| Air Products vs. Samsung Electronics Co | Air Products vs. Samsung Electronics Co | Air Products vs. Hyundai Motor | Air Products 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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