Correlation Between Hyundai and MHP SE
Can any of the company-specific risk be diversified away by investing in both Hyundai and MHP SE 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 MHP SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and MHP SE, you can compare the effects of market volatilities on Hyundai and MHP SE 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 MHP SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and MHP SE.
Diversification Opportunities for Hyundai and MHP SE
Excellent diversification
The 3 months correlation between Hyundai and MHP is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and MHP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MHP SE 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 MHP SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MHP SE has no effect on the direction of Hyundai i.e., Hyundai and MHP SE go up and down completely randomly.
Pair Corralation between Hyundai and MHP SE
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the MHP SE. In addition to that, Hyundai is 2.57 times more volatile than MHP SE. It trades about -0.1 of its total potential returns per unit of risk. MHP SE is currently generating about 0.34 per unit of volatility. If you would invest 402.00 in MHP SE on September 5, 2024 and sell it today you would earn a total of 33.00 from holding MHP SE or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. MHP SE
Performance |
| Timeline |
| Hyundai Motor |
| MHP SE |
Hyundai and MHP SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and MHP SE
The main advantage of trading using opposite Hyundai and MHP SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, MHP SE 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 MHP SE will offset losses from the drop in MHP SE's long position.| Hyundai vs. New Residential Investment | Hyundai vs. Bankers Investment Trust | Hyundai vs. Federal Realty Investment | Hyundai vs. MTI Wireless Edge |
| MHP SE vs. EVS Broadcast Equipment | MHP SE vs. Fulcrum Metals PLC | MHP SE vs. Trainline Plc | MHP SE vs. AMG Advanced Metallurgical |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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