Correlation Between Hyundai and Hansa Trust
Can any of the company-specific risk be diversified away by investing in both Hyundai and Hansa Trust 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 Hansa Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Hansa Trust, you can compare the effects of market volatilities on Hyundai and Hansa Trust 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 Hansa Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Hansa Trust.
Diversification Opportunities for Hyundai and Hansa Trust
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Hansa is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Hansa Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansa 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 Hansa Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansa Trust has no effect on the direction of Hyundai i.e., Hyundai and Hansa Trust go up and down completely randomly.
Pair Corralation between Hyundai and Hansa Trust
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 1.79 times more return on investment than Hansa Trust. However, Hyundai is 1.79 times more volatile than Hansa Trust. It trades about 0.06 of its potential returns per unit of risk. Hansa Trust is currently generating about 0.05 per unit of risk. If you would invest 3,812 in Hyundai Motor on September 12, 2024 and sell it today you would earn a total of 1,428 from holding Hyundai Motor or generate 37.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Hyundai Motor vs. Hansa Trust
Performance |
| Timeline |
| Hyundai Motor |
| Hansa Trust |
Hyundai and Hansa Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Hansa Trust
The main advantage of trading using opposite Hyundai and Hansa Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Hansa Trust 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 Hansa Trust will offset losses from the drop in Hansa Trust's long position.| Hyundai vs. Fonix Mobile plc | Hyundai vs. Worldwide Healthcare Trust | Hyundai vs. Omega Healthcare Investors | Hyundai vs. PureTech Health plc |
| Hansa Trust vs. Samsung Electronics Co | Hansa Trust vs. Samsung Electronics Co | Hansa Trust vs. Hyundai Motor | Hansa Trust 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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