Correlation Between Hyundai and Sage Group
Can any of the company-specific risk be diversified away by investing in both Hyundai and Sage Group 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 Sage Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Sage Group PLC, you can compare the effects of market volatilities on Hyundai and Sage Group 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 Sage Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Sage Group.
Diversification Opportunities for Hyundai and Sage Group
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Sage is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Sage Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sage Group PLC 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 Sage Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sage Group PLC has no effect on the direction of Hyundai i.e., Hyundai and Sage Group go up and down completely randomly.
Pair Corralation between Hyundai and Sage Group
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the Sage Group. In addition to that, Hyundai is 2.66 times more volatile than Sage Group PLC. It trades about -0.07 of its total potential returns per unit of risk. Sage Group PLC is currently generating about -0.02 per unit of volatility. If you would invest 129,500 in Sage Group PLC on September 24, 2024 and sell it today you would lose (500.00) from holding Sage Group PLC or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Hyundai Motor vs. Sage Group PLC
Performance |
| Timeline |
| Hyundai Motor |
| Sage Group PLC |
Hyundai and Sage Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Sage Group
The main advantage of trading using opposite Hyundai and Sage Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Sage Group 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 Sage Group will offset losses from the drop in Sage Group's long position.| Hyundai vs. The Mercantile Investment | Hyundai vs. Hansa Investment | Hyundai vs. Advanced Medical Solutions | Hyundai vs. Scandinavian Tobacco Group |
| Sage Group vs. Samsung Electronics Co | Sage Group vs. Samsung Electronics Co | Sage Group vs. Hyundai Motor | Sage Group vs. Toyota Motor Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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