Correlation Between Tungsten West and Hyundai
Can any of the company-specific risk be diversified away by investing in both Tungsten West 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 Tungsten West and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tungsten West PLC and Hyundai Motor, you can compare the effects of market volatilities on Tungsten West 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 Tungsten West with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tungsten West and Hyundai.
Diversification Opportunities for Tungsten West and Hyundai
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tungsten and Hyundai is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Tungsten West PLC and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Tungsten West 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 Tungsten West 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 Tungsten West i.e., Tungsten West and Hyundai go up and down completely randomly.
Pair Corralation between Tungsten West and Hyundai
Assuming the 90 days trading horizon Tungsten West PLC is expected to generate 3.31 times more return on investment than Hyundai. However, Tungsten West is 3.31 times more volatile than Hyundai Motor. It trades about 0.16 of its potential returns per unit of risk. Hyundai Motor is currently generating about -0.21 per unit of risk. If you would invest 263.00 in Tungsten West PLC on September 17, 2024 and sell it today you would earn a total of 50.00 from holding Tungsten West PLC or generate 19.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tungsten West PLC vs. Hyundai Motor
Performance |
| Timeline |
| Tungsten West PLC |
| Hyundai Motor |
Tungsten West and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tungsten West and Hyundai
The main advantage of trading using opposite Tungsten West and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tungsten West 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.| Tungsten West vs. Givaudan SA | Tungsten West vs. Antofagasta PLC | Tungsten West vs. Ferrexpo PLC | Tungsten West vs. Atalaya Mining |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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