Correlation Between Hyundai and Macerich
Can any of the company-specific risk be diversified away by investing in both Hyundai and Macerich 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 Macerich into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Macerich Co, you can compare the effects of market volatilities on Hyundai and Macerich 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 Macerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Macerich.
Diversification Opportunities for Hyundai and Macerich
Excellent diversification
The 3 months correlation between Hyundai and Macerich is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Macerich Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich 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 Macerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macerich has no effect on the direction of Hyundai i.e., Hyundai and Macerich go up and down completely randomly.
Pair Corralation between Hyundai and Macerich
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the Macerich. In addition to that, Hyundai is 1.23 times more volatile than Macerich Co. It trades about -0.1 of its total potential returns per unit of risk. Macerich Co is currently generating about 0.27 per unit of volatility. If you would invest 1,854 in Macerich Co on September 5, 2024 and sell it today you would earn a total of 238.00 from holding Macerich Co or generate 12.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hyundai Motor vs. Macerich Co
Performance |
| Timeline |
| Hyundai Motor |
| Macerich |
Hyundai and Macerich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Macerich
The main advantage of trading using opposite Hyundai and Macerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Macerich 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 Macerich will offset losses from the drop in Macerich's long position.| Hyundai vs. New Residential Investment | Hyundai vs. Bankers Investment Trust | Hyundai vs. Federal Realty Investment | Hyundai vs. MTI Wireless Edge |
| Macerich vs. Samsung Electronics Co | Macerich vs. Samsung Electronics Co | Macerich vs. Hyundai Motor | Macerich 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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