Correlation Between Hyundai and MT Bank
Can any of the company-specific risk be diversified away by investing in both Hyundai and MT Bank 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 MT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and MT Bank Corp, you can compare the effects of market volatilities on Hyundai and MT Bank 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 MT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and MT Bank.
Diversification Opportunities for Hyundai and MT Bank
Pay attention - limited upside
The 3 months correlation between Hyundai and 0JW2 is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and MT Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MT Bank 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 MT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MT Bank Corp has no effect on the direction of Hyundai i.e., Hyundai and MT Bank go up and down completely randomly.
Pair Corralation between Hyundai and MT Bank
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 1.59 times more return on investment than MT Bank. However, Hyundai is 1.59 times more volatile than MT Bank Corp. It trades about -0.09 of its potential returns per unit of risk. MT Bank Corp is currently generating about -0.32 per unit of risk. If you would invest 5,520 in Hyundai Motor on September 20, 2024 and sell it today you would lose (240.00) from holding Hyundai Motor or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hyundai Motor vs. MT Bank Corp
Performance |
| Timeline |
| Hyundai Motor |
| MT Bank Corp |
Hyundai and MT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and MT Bank
The main advantage of trading using opposite Hyundai and MT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, MT Bank 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 MT Bank will offset losses from the drop in MT Bank's long position.| Hyundai vs. Gear4music Plc | Hyundai vs. Thor Mining PLC | Hyundai vs. Auto Trader Group | Hyundai vs. Universal Music Group |
| MT Bank vs. Samsung Electronics Co | MT Bank vs. Samsung Electronics Co | MT Bank vs. Hyundai Motor | MT Bank vs. Reliance Industries Ltd |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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