Correlation Between Daeduck Electronics and Hyundai

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Can any of the company-specific risk be diversified away by investing in both Daeduck Electronics 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 Daeduck Electronics and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daeduck Electronics Co and Hyundai Motor Co, you can compare the effects of market volatilities on Daeduck Electronics 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 Daeduck Electronics with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daeduck Electronics and Hyundai.

Diversification Opportunities for Daeduck Electronics and Hyundai

-0.71
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Daeduck and Hyundai is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Daeduck Electronics Co and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Daeduck Electronics 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 Daeduck Electronics Co 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 Daeduck Electronics i.e., Daeduck Electronics and Hyundai go up and down completely randomly.

Pair Corralation between Daeduck Electronics and Hyundai

Assuming the 90 days trading horizon Daeduck Electronics is expected to generate 6.81 times less return on investment than Hyundai. But when comparing it to its historical volatility, Daeduck Electronics Co is 2.78 times less risky than Hyundai. It trades about 0.04 of its potential returns per unit of risk. Hyundai Motor Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  9,419,873  in Hyundai Motor Co on October 5, 2024 and sell it today you would earn a total of  6,350,127  from holding Hyundai Motor Co or generate 67.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Daeduck Electronics Co  vs.  Hyundai Motor Co

 Performance 
       Timeline  
Daeduck Electronics 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Daeduck Electronics Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Daeduck Electronics may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Hyundai Motor 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hyundai Motor Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Daeduck Electronics and Hyundai Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Daeduck Electronics and Hyundai

The main advantage of trading using opposite Daeduck Electronics and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daeduck Electronics 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.
The idea behind Daeduck Electronics Co and Hyundai Motor Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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