Correlation Between Hyundai and Mkango Resources
Can any of the company-specific risk be diversified away by investing in both Hyundai and Mkango Resources 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 Mkango Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Mkango Resources, you can compare the effects of market volatilities on Hyundai and Mkango Resources 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 Mkango Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Mkango Resources.
Diversification Opportunities for Hyundai and Mkango Resources
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Mkango is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Mkango Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mkango Resources 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 Mkango Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mkango Resources has no effect on the direction of Hyundai i.e., Hyundai and Mkango Resources go up and down completely randomly.
Pair Corralation between Hyundai and Mkango Resources
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 0.47 times more return on investment than Mkango Resources. However, Hyundai Motor is 2.11 times less risky than Mkango Resources. It trades about 0.07 of its potential returns per unit of risk. Mkango Resources is currently generating about 0.01 per unit of risk. If you would invest 3,350 in Hyundai Motor on September 12, 2024 and sell it today you would earn a total of 1,890 from holding Hyundai Motor or generate 56.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Hyundai Motor vs. Mkango Resources
Performance |
| Timeline |
| Hyundai Motor |
| Mkango Resources |
Hyundai and Mkango Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Mkango Resources
The main advantage of trading using opposite Hyundai and Mkango Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Mkango Resources 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 Mkango Resources will offset losses from the drop in Mkango Resources' long position.| Hyundai vs. Fonix Mobile plc | Hyundai vs. Worldwide Healthcare Trust | Hyundai vs. Omega Healthcare Investors | Hyundai vs. PureTech Health plc |
| Mkango Resources vs. Albion Technology General | Mkango Resources vs. Darden Restaurants | Mkango Resources vs. Polar Capital Technology | Mkango Resources vs. Sunny Optical Technology |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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