Correlation Between Hyundai and Concurrent Technologies
Can any of the company-specific risk be diversified away by investing in both Hyundai and Concurrent Technologies 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 Concurrent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Concurrent Technologies Plc, you can compare the effects of market volatilities on Hyundai and Concurrent Technologies 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 Concurrent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Concurrent Technologies.
Diversification Opportunities for Hyundai and Concurrent Technologies
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Concurrent is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies 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 Concurrent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concurrent Technologies has no effect on the direction of Hyundai i.e., Hyundai and Concurrent Technologies go up and down completely randomly.
Pair Corralation between Hyundai and Concurrent Technologies
Assuming the 90 days trading horizon Hyundai is expected to generate 1.6 times less return on investment than Concurrent Technologies. In addition to that, Hyundai is 1.22 times more volatile than Concurrent Technologies Plc. It trades about 0.07 of its total potential returns per unit of risk. Concurrent Technologies Plc is currently generating about 0.14 per unit of volatility. If you would invest 8,518 in Concurrent Technologies Plc on August 28, 2024 and sell it today you would earn a total of 6,632 from holding Concurrent Technologies Plc or generate 77.86% 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. Concurrent Technologies Plc
Performance |
| Timeline |
| Hyundai Motor |
| Concurrent Technologies |
Hyundai and Concurrent Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Concurrent Technologies
The main advantage of trading using opposite Hyundai and Concurrent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Concurrent Technologies 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 Concurrent Technologies will offset losses from the drop in Concurrent Technologies' long position.| Hyundai vs. MG Plc | Hyundai vs. Admiral Group PLC | Hyundai vs. Anglo American PLC | Hyundai vs. Vodafone Group PLC |
| Concurrent Technologies vs. Samsung Electronics Co | Concurrent Technologies vs. Samsung Electronics Co | Concurrent Technologies vs. Toyota Motor Corp | Concurrent Technologies vs. Hon Hai Precision |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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