Correlation Between Zapp Electric and Hyundai
Can any of the company-specific risk be diversified away by investing in both Zapp Electric 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 Zapp Electric and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zapp Electric Vehicles and Hyundai Motor Co, you can compare the effects of market volatilities on Zapp Electric 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 Zapp Electric with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zapp Electric and Hyundai.
Diversification Opportunities for Zapp Electric and Hyundai
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zapp and Hyundai is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Zapp Electric Vehicles and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Zapp Electric 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 Zapp Electric Vehicles 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 Zapp Electric i.e., Zapp Electric and Hyundai go up and down completely randomly.
Pair Corralation between Zapp Electric and Hyundai
Assuming the 90 days horizon Zapp Electric Vehicles is expected to generate 3.31 times more return on investment than Hyundai. However, Zapp Electric is 3.31 times more volatile than Hyundai Motor Co. It trades about 0.01 of its potential returns per unit of risk. Hyundai Motor Co is currently generating about -0.05 per unit of risk. If you would invest 0.93 in Zapp Electric Vehicles on August 31, 2024 and sell it today you would lose (0.02) from holding Zapp Electric Vehicles or give up 2.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zapp Electric Vehicles vs. Hyundai Motor Co
Performance |
| Timeline |
| Zapp Electric Vehicles |
| Hyundai Motor |
Zapp Electric and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zapp Electric and Hyundai
The main advantage of trading using opposite Zapp Electric and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zapp Electric 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.| Zapp Electric vs. GreenPower Motor | Zapp Electric vs. Li Auto | Zapp Electric vs. ZEEKR Intelligent Technology | Zapp Electric vs. Volcon 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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