Correlation Between Hyundai and Auction Technology
Can any of the company-specific risk be diversified away by investing in both Hyundai and Auction Technology 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 Auction Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Auction Technology Group, you can compare the effects of market volatilities on Hyundai and Auction Technology 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Auction Technology.
Diversification Opportunities for Hyundai and Auction Technology
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Auction is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of Hyundai i.e., Hyundai and Auction Technology go up and down completely randomly.
Pair Corralation between Hyundai and Auction Technology
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the Auction Technology. In addition to that, Hyundai is 1.07 times more volatile than Auction Technology Group. It trades about -0.11 of its total potential returns per unit of risk. Auction Technology Group is currently generating about 0.05 per unit of volatility. If you would invest 44,100 in Auction Technology Group on August 25, 2024 and sell it today you would earn a total of 850.00 from holding Auction Technology Group or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Auction Technology Group
Performance |
| Timeline |
| Hyundai Motor |
| Auction Technology |
Hyundai and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Auction Technology
The main advantage of trading using opposite Hyundai and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| Hyundai vs. Toyota Motor Corp | Hyundai vs. SoftBank Group Corp | Hyundai vs. State Bank of | Hyundai vs. Freddie Mac |
| Auction Technology vs. Samsung Electronics Co | Auction Technology vs. Samsung Electronics Co | Auction Technology vs. Hyundai Motor | Auction Technology 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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