Correlation Between Hyundai and Cembra Money
Can any of the company-specific risk be diversified away by investing in both Hyundai and Cembra Money 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 Cembra Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Cembra Money Bank, you can compare the effects of market volatilities on Hyundai and Cembra Money 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 Cembra Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Cembra Money.
Diversification Opportunities for Hyundai and Cembra Money
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and Cembra is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank 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 Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of Hyundai i.e., Hyundai and Cembra Money go up and down completely randomly.
Pair Corralation between Hyundai and Cembra Money
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 2.38 times more return on investment than Cembra Money. However, Hyundai is 2.38 times more volatile than Cembra Money Bank. It trades about 0.08 of its potential returns per unit of risk. Cembra Money Bank is currently generating about 0.11 per unit of risk. If you would invest 3,602 in Hyundai Motor on September 4, 2024 and sell it today you would earn a total of 1,798 from holding Hyundai Motor or generate 49.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Hyundai Motor vs. Cembra Money Bank
Performance |
| Timeline |
| Hyundai Motor |
| Cembra Money Bank |
Hyundai and Cembra Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Cembra Money
The main advantage of trading using opposite Hyundai and Cembra Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Cembra Money 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 Cembra Money will offset losses from the drop in Cembra Money's long position.| Hyundai vs. Empire Metals Limited | Hyundai vs. The Mercantile Investment | Hyundai vs. Sovereign Metals | Hyundai vs. Cornish Metals |
| Cembra Money vs. Samsung Electronics Co | Cembra Money vs. Samsung Electronics Co | Cembra Money vs. Hyundai Motor | Cembra Money 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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