Correlation Between LifeSafe Holdings and Hyundai
Can any of the company-specific risk be diversified away by investing in both LifeSafe Holdings 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 LifeSafe Holdings and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LifeSafe Holdings PLC and Hyundai Motor, you can compare the effects of market volatilities on LifeSafe Holdings 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 LifeSafe Holdings with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of LifeSafe Holdings and Hyundai.
Diversification Opportunities for LifeSafe Holdings and Hyundai
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between LifeSafe and Hyundai is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding LifeSafe Holdings PLC and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and LifeSafe Holdings 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 LifeSafe Holdings PLC 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 LifeSafe Holdings i.e., LifeSafe Holdings and Hyundai go up and down completely randomly.
Pair Corralation between LifeSafe Holdings and Hyundai
Assuming the 90 days trading horizon LifeSafe Holdings PLC is expected to under-perform the Hyundai. But the stock apears to be less risky and, when comparing its historical volatility, LifeSafe Holdings PLC is 1.09 times less risky than Hyundai. The stock trades about -0.28 of its potential returns per unit of risk. The Hyundai Motor is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 5,500 in Hyundai Motor on September 12, 2024 and sell it today you would lose (260.00) from holding Hyundai Motor or give up 4.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
LifeSafe Holdings PLC vs. Hyundai Motor
Performance |
| Timeline |
| LifeSafe Holdings PLC |
| Hyundai Motor |
LifeSafe Holdings and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LifeSafe Holdings and Hyundai
The main advantage of trading using opposite LifeSafe Holdings and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LifeSafe Holdings 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.| LifeSafe Holdings vs. Impax Environmental Markets | LifeSafe Holdings vs. Compal Electronics GDR | LifeSafe Holdings vs. Gaming Realms plc | LifeSafe Holdings vs. Verizon Communications |
| Hyundai vs. Fonix Mobile plc | Hyundai vs. Worldwide Healthcare Trust | Hyundai vs. Omega Healthcare Investors | Hyundai vs. PureTech Health plc |
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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