Correlation Between Hyundai and Tyson Foods
Can any of the company-specific risk be diversified away by investing in both Hyundai and Tyson Foods 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 Tyson Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Tyson Foods Cl, you can compare the effects of market volatilities on Hyundai and Tyson Foods 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 Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Tyson Foods.
Diversification Opportunities for Hyundai and Tyson Foods
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyundai and Tyson is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Tyson Foods Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods Cl 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 Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods Cl has no effect on the direction of Hyundai i.e., Hyundai and Tyson Foods go up and down completely randomly.
Pair Corralation between Hyundai and Tyson Foods
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 1.56 times more return on investment than Tyson Foods. However, Hyundai is 1.56 times more volatile than Tyson Foods Cl. It trades about 0.06 of its potential returns per unit of risk. Tyson Foods Cl is currently generating about 0.06 per unit of risk. If you would invest 3,598 in Hyundai Motor on August 31, 2024 and sell it today you would earn a total of 2,022 from holding Hyundai Motor or generate 56.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.94% |
| Values | Daily Returns |
Hyundai Motor vs. Tyson Foods Cl
Performance |
| Timeline |
| Hyundai Motor |
| Tyson Foods Cl |
Hyundai and Tyson Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Tyson Foods
The main advantage of trading using opposite Hyundai and Tyson Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Tyson Foods 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 Tyson Foods will offset losses from the drop in Tyson Foods' long position.| Hyundai vs. Empire Metals Limited | Hyundai vs. Vienna Insurance Group | Hyundai vs. Ecclesiastical Insurance Office | Hyundai vs. Adriatic Metals |
| Tyson Foods vs. Neometals | Tyson Foods vs. Coor Service Management | Tyson Foods vs. Aeorema Communications Plc | Tyson Foods vs. JLEN Environmental Assets |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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