Correlation Between Hyundai and Spirax Sarco
Can any of the company-specific risk be diversified away by investing in both Hyundai and Spirax Sarco 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 Spirax Sarco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Spirax Sarco Engineering PLC, you can compare the effects of market volatilities on Hyundai and Spirax Sarco 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 Spirax Sarco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Spirax Sarco.
Diversification Opportunities for Hyundai and Spirax Sarco
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Spirax is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Spirax Sarco Engineering PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirax Sarco Enginee 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 Spirax Sarco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirax Sarco Enginee has no effect on the direction of Hyundai i.e., Hyundai and Spirax Sarco go up and down completely randomly.
Pair Corralation between Hyundai and Spirax Sarco
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 1.45 times more return on investment than Spirax Sarco. However, Hyundai is 1.45 times more volatile than Spirax Sarco Engineering PLC. It trades about 0.08 of its potential returns per unit of risk. Spirax Sarco Engineering PLC is currently generating about -0.05 per unit of risk. If you would invest 3,766 in Hyundai Motor on September 2, 2024 and sell it today you would earn a total of 1,854 from holding Hyundai Motor or generate 49.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Spirax Sarco Engineering PLC
Performance |
| Timeline |
| Hyundai Motor |
| Spirax Sarco Enginee |
Hyundai and Spirax Sarco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Spirax Sarco
The main advantage of trading using opposite Hyundai and Spirax Sarco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Spirax Sarco 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 Spirax Sarco will offset losses from the drop in Spirax Sarco's long position.| Hyundai vs. Catalyst Media Group | Hyundai vs. CATLIN GROUP | Hyundai vs. Tamburi Investment Partners | Hyundai vs. Magnora ASA |
| Spirax Sarco vs. Cairo Communication SpA | Spirax Sarco vs. Gamma Communications PLC | Spirax Sarco vs. Induction Healthcare Group | Spirax Sarco vs. Ecclesiastical Insurance Office |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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