Correlation Between Vienna Insurance and Hyundai

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

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

Diversification Opportunities for Vienna Insurance and Hyundai

0.57

Correlation Coefficient

Vienna Insurance  Hyundai

Very weak diversification

The 3 months correlation between Vienna and Hyundai is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Vienna Insurance 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 Vienna Insurance Group 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 Vienna Insurance i.e., Vienna Insurance and Hyundai go up and down completely randomly.

Pair Corralation between Vienna Insurance and Hyundai

Assuming the 90 days trading horizon Vienna Insurance Group is expected to generate 0.4 times more return on investment than Hyundai. However, Vienna Insurance Group is 2.53 times less risky than Hyundai. It trades about -0.14 of its potential returns per unit of risk. Hyundai Motor is currently generating about -0.09 per unit of risk. If you would invest  3,180  in Vienna Insurance Group on August 31, 2024 and sell it today you would lose (262.00) from holding Vienna Insurance Group or give up 8.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Vienna Insurance Group  vs.  Hyundai Motor

Vienna Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vienna Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private 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. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Vienna Insurance and Hyundai

The main advantage of trading using opposite Vienna Insurance and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance 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 Vienna Insurance Group 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.