Correlation Between Hyundai and Impax Environmental
Can any of the company-specific risk be diversified away by investing in both Hyundai and Impax Environmental 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 Impax Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Impax Environmental Markets, you can compare the effects of market volatilities on Hyundai and Impax Environmental 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 Impax Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Impax Environmental.
Diversification Opportunities for Hyundai and Impax Environmental
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hyundai and Impax is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Impax Environmental Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impax Environmental 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 Impax Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impax Environmental has no effect on the direction of Hyundai i.e., Hyundai and Impax Environmental go up and down completely randomly.
Pair Corralation between Hyundai and Impax Environmental
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 2.78 times more return on investment than Impax Environmental. However, Hyundai is 2.78 times more volatile than Impax Environmental Markets. It trades about 0.02 of its potential returns per unit of risk. Impax Environmental Markets is currently generating about -0.03 per unit of risk. If you would invest 5,531 in Hyundai Motor on September 2, 2024 and sell it today you would earn a total of 89.00 from holding Hyundai Motor or generate 1.61% 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. Impax Environmental Markets
Performance |
| Timeline |
| Hyundai Motor |
| Impax Environmental |
Hyundai and Impax Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Impax Environmental
The main advantage of trading using opposite Hyundai and Impax Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Impax Environmental 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 Impax Environmental will offset losses from the drop in Impax Environmental's long position.| Hyundai vs. Catalyst Media Group | Hyundai vs. CATLIN GROUP | Hyundai vs. Tamburi Investment Partners | Hyundai vs. Magnora ASA |
| Impax Environmental vs. Toyota Motor Corp | Impax Environmental vs. SoftBank Group Corp | Impax Environmental vs. OTP Bank Nyrt | Impax Environmental vs. Las Vegas Sands |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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