Correlation Between Hyundai and GlobalData PLC
Can any of the company-specific risk be diversified away by investing in both Hyundai and GlobalData PLC 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 GlobalData PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and GlobalData PLC, you can compare the effects of market volatilities on Hyundai and GlobalData PLC 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 GlobalData PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and GlobalData PLC.
Diversification Opportunities for Hyundai and GlobalData PLC
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hyundai and GlobalData is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and GlobalData PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalData 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 GlobalData PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalData PLC has no effect on the direction of Hyundai i.e., Hyundai and GlobalData PLC go up and down completely randomly.
Pair Corralation between Hyundai and GlobalData PLC
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 1.01 times more return on investment than GlobalData PLC. However, Hyundai is 1.01 times more volatile than GlobalData PLC. It trades about 0.04 of its potential returns per unit of risk. GlobalData PLC is currently generating about -0.14 per unit of risk. If you would invest 5,300 in Hyundai Motor on September 13, 2024 and sell it today you would earn a total of 80.00 from holding Hyundai Motor or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. GlobalData PLC
Performance |
| Timeline |
| Hyundai Motor |
| GlobalData PLC |
Hyundai and GlobalData PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and GlobalData PLC
The main advantage of trading using opposite Hyundai and GlobalData PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, GlobalData PLC 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 GlobalData PLC will offset losses from the drop in GlobalData PLC's long position.| Hyundai vs. Panther Metals PLC | Hyundai vs. METALL ZUG AG | Hyundai vs. Power Metal Resources | Hyundai vs. American Homes 4 |
| GlobalData PLC vs. Samsung Electronics Co | GlobalData PLC vs. Samsung Electronics Co | GlobalData PLC vs. Hyundai Motor | GlobalData PLC 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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