Correlation Between Hyundai and BYD Co
Can any of the company-specific risk be diversified away by investing in both Hyundai and BYD Co 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 BYD Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and BYD Co, you can compare the effects of market volatilities on Hyundai and BYD Co 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 BYD Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and BYD Co.
Diversification Opportunities for Hyundai and BYD Co
Very good diversification
The 3 months correlation between Hyundai and BYD is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and BYD Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BYD Co 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 BYD Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BYD Co has no effect on the direction of Hyundai i.e., Hyundai and BYD Co go up and down completely randomly.
Pair Corralation between Hyundai and BYD Co
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the BYD Co. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Motor is 1.41 times less risky than BYD Co. The stock trades about -0.04 of its potential returns per unit of risk. The BYD Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,558 in BYD Co on August 29, 2024 and sell it today you would earn a total of 2.00 from holding BYD Co or generate 0.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. BYD Co
Performance |
| Timeline |
| Hyundai Motor |
| BYD Co |
Hyundai and BYD Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and BYD Co
The main advantage of trading using opposite Hyundai and BYD Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, BYD Co 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 BYD Co will offset losses from the drop in BYD Co's long position.| Hyundai vs. Ondine Biomedical | Hyundai vs. Europa Metals | Hyundai vs. Lendinvest PLC | Hyundai vs. Neometals |
| BYD Co vs. Lendinvest PLC | BYD Co vs. Neometals | BYD Co vs. Albion Technology General | BYD Co vs. Jupiter Fund 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |