Correlation Between Hyundai and Brickability Group
Can any of the company-specific risk be diversified away by investing in both Hyundai and Brickability Group 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 Brickability Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Brickability Group Plc, you can compare the effects of market volatilities on Hyundai and Brickability Group 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 Brickability Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Brickability Group.
Diversification Opportunities for Hyundai and Brickability Group
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyundai and Brickability is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Brickability Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brickability Group Plc 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 Brickability Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brickability Group Plc has no effect on the direction of Hyundai i.e., Hyundai and Brickability Group go up and down completely randomly.
Pair Corralation between Hyundai and Brickability Group
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the Brickability Group. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Motor is 1.47 times less risky than Brickability Group. The stock trades about -0.09 of its potential returns per unit of risk. The Brickability Group Plc is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 6,620 in Brickability Group Plc on September 12, 2024 and sell it today you would lose (160.00) from holding Brickability Group Plc or give up 2.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Brickability Group Plc
Performance |
| Timeline |
| Hyundai Motor |
| Brickability Group Plc |
Hyundai and Brickability Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Brickability Group
The main advantage of trading using opposite Hyundai and Brickability Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Brickability Group 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 Brickability Group will offset losses from the drop in Brickability Group's long position.| Hyundai vs. Fonix Mobile plc | Hyundai vs. Worldwide Healthcare Trust | Hyundai vs. Omega Healthcare Investors | Hyundai vs. PureTech Health plc |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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