Correlation Between Hyundai and Intuitive Investments
Can any of the company-specific risk be diversified away by investing in both Hyundai and Intuitive Investments 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 Intuitive Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Intuitive Investments Group, you can compare the effects of market volatilities on Hyundai and Intuitive Investments 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 Intuitive Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Intuitive Investments.
Diversification Opportunities for Hyundai and Intuitive Investments
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hyundai and Intuitive is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments 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 Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of Hyundai i.e., Hyundai and Intuitive Investments go up and down completely randomly.
Pair Corralation between Hyundai and Intuitive Investments
Assuming the 90 days trading horizon Hyundai is expected to generate 2.73 times less return on investment than Intuitive Investments. But when comparing it to its historical volatility, Hyundai Motor is 2.81 times less risky than Intuitive Investments. It trades about 0.06 of its potential returns per unit of risk. Intuitive Investments Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,500 in Intuitive Investments Group on September 2, 2024 and sell it today you would earn a total of 6,800 from holding Intuitive Investments Group or generate 123.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Intuitive Investments Group
Performance |
| Timeline |
| Hyundai Motor |
| Intuitive Investments |
Hyundai and Intuitive Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Intuitive Investments
The main advantage of trading using opposite Hyundai and Intuitive Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Intuitive Investments 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 Intuitive Investments will offset losses from the drop in Intuitive Investments' long position.| Hyundai vs. Catalyst Media Group | Hyundai vs. CATLIN GROUP | Hyundai vs. Tamburi Investment Partners | Hyundai vs. Magnora ASA |
| Intuitive Investments vs. Toyota Motor Corp | Intuitive Investments vs. SoftBank Group Corp | Intuitive Investments vs. OTP Bank Nyrt | Intuitive Investments 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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