Correlation Between SAFETY MEDICAL and Hyundai
Can any of the company-specific risk be diversified away by investing in both SAFETY MEDICAL 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 SAFETY MEDICAL and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAFETY MEDICAL PROD and Hyundai Motor, you can compare the effects of market volatilities on SAFETY MEDICAL 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 SAFETY MEDICAL with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAFETY MEDICAL and Hyundai.
Diversification Opportunities for SAFETY MEDICAL and Hyundai
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SAFETY and Hyundai is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding SAFETY MEDICAL PROD and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and SAFETY MEDICAL 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 SAFETY MEDICAL PROD 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 SAFETY MEDICAL i.e., SAFETY MEDICAL and Hyundai go up and down completely randomly.
Pair Corralation between SAFETY MEDICAL and Hyundai
Assuming the 90 days trading horizon SAFETY MEDICAL PROD is expected to under-perform the Hyundai. In addition to that, SAFETY MEDICAL is 1.63 times more volatile than Hyundai Motor. It trades about -0.32 of its total potential returns per unit of risk. Hyundai Motor is currently generating about 0.02 per unit of volatility. If you would invest 5,360 in Hyundai Motor on August 30, 2024 and sell it today you would earn a total of 40.00 from holding Hyundai Motor or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAFETY MEDICAL PROD vs. Hyundai Motor
Performance |
| Timeline |
| SAFETY MEDICAL PROD |
| Hyundai Motor |
SAFETY MEDICAL and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAFETY MEDICAL and Hyundai
The main advantage of trading using opposite SAFETY MEDICAL and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAFETY MEDICAL 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.| SAFETY MEDICAL vs. AOI Electronics Co | SAFETY MEDICAL vs. Solstad Offshore ASA | SAFETY MEDICAL vs. CVW CLEANTECH INC | SAFETY MEDICAL vs. KIMBALL ELECTRONICS |
| Hyundai vs. PKSHA TECHNOLOGY INC | Hyundai vs. Singapore Reinsurance | Hyundai vs. Check Point Software | Hyundai vs. Amkor Technology |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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