Correlation Between Hyundai and Malvern International
Can any of the company-specific risk be diversified away by investing in both Hyundai and Malvern International 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 Malvern International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Malvern International, you can compare the effects of market volatilities on Hyundai and Malvern International 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 Malvern International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Malvern International.
Diversification Opportunities for Hyundai and Malvern International
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyundai and Malvern is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Malvern International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malvern International 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 Malvern International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malvern International has no effect on the direction of Hyundai i.e., Hyundai and Malvern International go up and down completely randomly.
Pair Corralation between Hyundai and Malvern International
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 1.25 times more return on investment than Malvern International. However, Hyundai is 1.25 times more volatile than Malvern International. It trades about 0.01 of its potential returns per unit of risk. Malvern International is currently generating about 0.01 per unit of risk. If you would invest 5,590 in Hyundai Motor on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Hyundai Motor or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Malvern International
Performance |
| Timeline |
| Hyundai Motor |
| Malvern International |
Hyundai and Malvern International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Malvern International
The main advantage of trading using opposite Hyundai and Malvern International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Malvern International 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 Malvern International will offset losses from the drop in Malvern International's long position.| Hyundai vs. Bank of Ireland | Hyundai vs. Sparebank 1 SR | Hyundai vs. Elmos Semiconductor SE | Hyundai vs. Cincinnati Financial Corp |
| Malvern International vs. Naked Wines plc | Malvern International vs. Ironveld Plc | Malvern International vs. Ally Financial | Malvern International vs. Sparebank 1 SR |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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