Correlation Between X FAB and Hyundai
Can any of the company-specific risk be diversified away by investing in both X FAB 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 X FAB and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X FAB Silicon Foundries and Hyundai Motor, you can compare the effects of market volatilities on X FAB 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 X FAB with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Hyundai.
Diversification Opportunities for X FAB and Hyundai
Good diversification
The 3 months correlation between XFB and Hyundai is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and X FAB 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 X FAB Silicon Foundries 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 X FAB i.e., X FAB and Hyundai go up and down completely randomly.
Pair Corralation between X FAB and Hyundai
Assuming the 90 days trading horizon X FAB is expected to generate 7.6 times less return on investment than Hyundai. In addition to that, X FAB is 2.04 times more volatile than Hyundai Motor. It trades about 0.06 of its total potential returns per unit of risk. Hyundai Motor is currently generating about 0.86 per unit of volatility. If you would invest 4,700 in Hyundai Motor on October 15, 2024 and sell it today you would earn a total of 240.00 from holding Hyundai Motor or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 25.0% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Hyundai Motor
Performance |
| Timeline |
| X FAB Silicon |
| Hyundai Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
X FAB and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Hyundai
The main advantage of trading using opposite X FAB and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB 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.| X FAB vs. CHRYSALIS INVESTMENTS LTD | X FAB vs. JLF INVESTMENT | X FAB vs. Playa Hotels Resorts | X FAB vs. Hyatt Hotels |
| Hyundai vs. X FAB Silicon Foundries | Hyundai vs. Tradegate AG Wertpapierhandelsbank | Hyundai vs. Silicon Motion Technology | Hyundai vs. Mitsubishi Gas Chemical |
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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