Correlation Between International Biotechnology and Hyundai
Can any of the company-specific risk be diversified away by investing in both International Biotechnology and Hyundai 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 International Biotechnology and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Biotechnology Trust and Hyundai Motor, you can compare the effects of market volatilities on International Biotechnology and Hyundai 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 International Biotechnology with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Biotechnology and Hyundai.
Diversification Opportunities for International Biotechnology and Hyundai
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and Hyundai is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding International Biotechnology Tr and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and International Biotechnology 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 International Biotechnology Trust are associated (or correlated) with Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of International Biotechnology i.e., International Biotechnology and Hyundai go up and down completely randomly.
Pair Corralation between International Biotechnology and Hyundai
Assuming the 90 days trading horizon International Biotechnology is expected to generate 6.07 times less return on investment than Hyundai. But when comparing it to its historical volatility, International Biotechnology Trust is 1.81 times less risky than Hyundai. It trades about 0.02 of its potential returns per unit of risk. Hyundai Motor is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,905 in Hyundai Motor on October 11, 2024 and sell it today you would earn a total of 2,375 from holding Hyundai Motor or generate 81.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.59% |
| Values | Daily Returns |
International Biotechnology Tr vs. Hyundai Motor
Performance |
| Timeline |
| International Biotechnology |
| Hyundai Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
International Biotechnology and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Biotechnology and Hyundai
The main advantage of trading using opposite International Biotechnology and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Biotechnology position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| International Biotechnology vs. Ross Stores | International Biotechnology vs. Prosiebensat 1 Media | International Biotechnology vs. Liberty Media Corp | International Biotechnology vs. Costco Wholesale Corp |
| Hyundai vs. Ecclesiastical Insurance Office | Hyundai vs. Fortune Brands Home | Hyundai vs. American Homes 4 | Hyundai vs. International Biotechnology Trust |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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