Correlation Between Linedata Services and Hyundai
Can any of the company-specific risk be diversified away by investing in both Linedata Services 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 Linedata Services and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Linedata Services SA and Hyundai Motor, you can compare the effects of market volatilities on Linedata Services 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 Linedata Services with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linedata Services and Hyundai.
Diversification Opportunities for Linedata Services and Hyundai
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Linedata and Hyundai is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Linedata Services SA and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Linedata Services 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 Linedata Services SA 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 Linedata Services i.e., Linedata Services and Hyundai go up and down completely randomly.
Pair Corralation between Linedata Services and Hyundai
Assuming the 90 days trading horizon Linedata Services SA is expected to generate 0.73 times more return on investment than Hyundai. However, Linedata Services SA is 1.36 times less risky than Hyundai. It trades about 0.1 of its potential returns per unit of risk. Hyundai Motor is currently generating about 0.06 per unit of risk. If you would invest 5,247 in Linedata Services SA on October 16, 2024 and sell it today you would earn a total of 3,073 from holding Linedata Services SA or generate 58.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.88% |
| Values | Daily Returns |
Linedata Services SA vs. Hyundai Motor
Performance |
| Timeline |
| Linedata Services |
| Hyundai Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Linedata Services and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linedata Services and Hyundai
The main advantage of trading using opposite Linedata Services and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linedata Services 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.| Linedata Services vs. Minerals Technologies | Linedata Services vs. PennantPark Investment | Linedata Services vs. Easy Software AG | Linedata Services vs. New Residential Investment |
| Hyundai vs. Teradata Corp | Hyundai vs. DATATEC LTD 2 | Hyundai vs. Linedata Services SA | Hyundai vs. CVW CLEANTECH INC |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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