Correlation Between Hyundai and Allstate Corp
Can any of the company-specific risk be diversified away by investing in both Hyundai and Allstate Corp 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 Allstate Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Allstate Corp, you can compare the effects of market volatilities on Hyundai and Allstate Corp 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 Allstate Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Allstate Corp.
Diversification Opportunities for Hyundai and Allstate Corp
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Allstate is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Allstate Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allstate Corp 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 Allstate Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allstate Corp has no effect on the direction of Hyundai i.e., Hyundai and Allstate Corp go up and down completely randomly.
Pair Corralation between Hyundai and Allstate Corp
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 1.72 times more return on investment than Allstate Corp. However, Hyundai is 1.72 times more volatile than Allstate Corp. It trades about -0.03 of its potential returns per unit of risk. Allstate Corp is currently generating about -0.12 per unit of risk. If you would invest 5,500 in Hyundai Motor on September 12, 2024 and sell it today you would lose (120.00) from holding Hyundai Motor or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hyundai Motor vs. Allstate Corp
Performance |
| Timeline |
| Hyundai Motor |
| Allstate Corp |
Hyundai and Allstate Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Allstate Corp
The main advantage of trading using opposite Hyundai and Allstate Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Allstate Corp 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 Allstate Corp will offset losses from the drop in Allstate Corp's long position.| Hyundai vs. Fonix Mobile plc | Hyundai vs. Worldwide Healthcare Trust | Hyundai vs. Omega Healthcare Investors | Hyundai vs. PureTech Health plc |
| Allstate Corp vs. Odyssean Investment Trust | Allstate Corp vs. Bankers Investment Trust | Allstate Corp vs. Kinnevik Investment AB | Allstate Corp vs. Liontrust Asset 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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