Correlation Between MT Bank and Hyundai

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

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

Diversification Opportunities for MT Bank and Hyundai

0.0

Correlation Coefficient

MT Bank  Hyundai

Pay attention - limited upside

The 3 months correlation between 0JW2 and Hyundai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank Corp and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and MT Bank 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 MT Bank Corp 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 MT Bank i.e., MT Bank and Hyundai go up and down completely randomly.

Pair Corralation between MT Bank and Hyundai

Assuming the 90 days trading horizon MT Bank Corp is expected to under-perform the Hyundai. But the stock apears to be less risky and, when comparing its historical volatility, MT Bank Corp is 1.42 times less risky than Hyundai. The stock trades about -0.26 of its potential returns per unit of risk. The Hyundai Motor is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  5,180  in Hyundai Motor on October 10, 2024 and sell it today you would earn a total of  100.00  from holding Hyundai Motor or generate 1.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	45.0%
Values	Daily Returns

MT Bank Corp  vs.  Hyundai Motor

MT Bank Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MT Bank Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MT Bank 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

Very Weak

Over the last 90 days Hyundai Motor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Hyundai is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MT Bank and Hyundai

The main advantage of trading using opposite MT Bank and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT Bank 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 MT Bank Corp 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 Stocks Directory module to find actively traded stocks across global markets.