Correlation Between Mercantile Investment and Hyundai
Can any of the company-specific risk be diversified away by investing in both Mercantile Investment 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 Mercantile Investment and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Mercantile Investment and Hyundai Motor, you can compare the effects of market volatilities on Mercantile Investment 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 Mercantile Investment with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercantile Investment and Hyundai.
Diversification Opportunities for Mercantile Investment and Hyundai
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mercantile and Hyundai is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding The Mercantile Investment and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Mercantile Investment 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 The Mercantile Investment 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 Mercantile Investment i.e., Mercantile Investment and Hyundai go up and down completely randomly.
Pair Corralation between Mercantile Investment and Hyundai
Assuming the 90 days trading horizon Mercantile Investment is expected to generate 2.61 times less return on investment than Hyundai. But when comparing it to its historical volatility, The Mercantile Investment is 1.82 times less risky than Hyundai. It trades about 0.05 of its potential returns per unit of risk. Hyundai Motor is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,542 in Hyundai Motor on September 12, 2024 and sell it today you would earn a total of 2,698 from holding Hyundai Motor or generate 106.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
The Mercantile Investment vs. Hyundai Motor
Performance |
| Timeline |
| The Mercantile Investment |
| Hyundai Motor |
Mercantile Investment and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercantile Investment and Hyundai
The main advantage of trading using opposite Mercantile Investment and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercantile Investment 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.| Mercantile Investment vs. Flow Traders NV | Mercantile Investment vs. Fonix Mobile plc | Mercantile Investment vs. Dalata Hotel Group | Mercantile Investment vs. Spirent Communications plc |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |