Correlation Between Curo Holdings and Hyundai

Can any of the company-specific risk be diversified away by investing in both Curo Holdings 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 Curo Holdings and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Curo Holdings Co and Hyundai Motor, you can compare the effects of market volatilities on Curo Holdings 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 Curo Holdings with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Curo Holdings and Hyundai.

Diversification Opportunities for Curo Holdings and Hyundai

0.9

Correlation Coefficient

Curo Holdings  Hyundai

Almost no diversification

The 3 months correlation between Curo and Hyundai is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Curo Holdings Co and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Curo Holdings 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 Curo Holdings 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 Curo Holdings i.e., Curo Holdings and Hyundai go up and down completely randomly.

Pair Corralation between Curo Holdings and Hyundai

Assuming the 90 days trading horizon Curo Holdings Co is expected to under-perform the Hyundai. But the stock apears to be less risky and, when comparing its historical volatility, Curo Holdings Co is 1.64 times less risky than Hyundai. The stock trades about -0.6 of its potential returns per unit of risk. The Hyundai Motor is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  22,350,000  in Hyundai Motor on September 27, 2024 and sell it today you would lose (700,000) from holding Hyundai Motor or give up 3.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	27.27%
Values	Daily Returns

Curo Holdings Co  vs.  Hyundai Motor

Curo Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Curo Holdings 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hyundai Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hyundai Motor 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Curo Holdings and Hyundai

The main advantage of trading using opposite Curo Holdings and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Curo Holdings 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 Curo Holdings Co and Hyundai Motor 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.