Correlation Between Hyundai and Bellevue Healthcare
Can any of the company-specific risk be diversified away by investing in both Hyundai and Bellevue Healthcare 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 Bellevue Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Bellevue Healthcare Trust, you can compare the effects of market volatilities on Hyundai and Bellevue Healthcare 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 Bellevue Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Bellevue Healthcare.
Diversification Opportunities for Hyundai and Bellevue Healthcare
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hyundai and Bellevue is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Bellevue Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Healthcare Trust 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 Bellevue Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Healthcare Trust has no effect on the direction of Hyundai i.e., Hyundai and Bellevue Healthcare go up and down completely randomly.
Pair Corralation between Hyundai and Bellevue Healthcare
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the Bellevue Healthcare. In addition to that, Hyundai is 2.5 times more volatile than Bellevue Healthcare Trust. It trades about -0.08 of its total potential returns per unit of risk. Bellevue Healthcare Trust is currently generating about -0.16 per unit of volatility. If you would invest 15,660 in Bellevue Healthcare Trust on September 2, 2024 and sell it today you would lose (1,540) from holding Bellevue Healthcare Trust or give up 9.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Bellevue Healthcare Trust
Performance |
| Timeline |
| Hyundai Motor |
| Bellevue Healthcare Trust |
Hyundai and Bellevue Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Bellevue Healthcare
The main advantage of trading using opposite Hyundai and Bellevue Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Bellevue Healthcare 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 Bellevue Healthcare will offset losses from the drop in Bellevue Healthcare's long position.| Hyundai vs. Catalyst Media Group | Hyundai vs. CATLIN GROUP | Hyundai vs. Tamburi Investment Partners | Hyundai vs. Magnora ASA |
| Bellevue Healthcare vs. Virgin Wines UK | Bellevue Healthcare vs. Roebuck Food Group | Bellevue Healthcare vs. Leroy Seafood Group | Bellevue Healthcare vs. Flow Traders NV |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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