Correlation Between Newmont Corp and Hyundai
Can any of the company-specific risk be diversified away by investing in both Newmont Corp 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 Newmont Corp and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmont Corp and Hyundai Motor, you can compare the effects of market volatilities on Newmont Corp 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 Newmont Corp with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Corp and Hyundai.
Diversification Opportunities for Newmont Corp and Hyundai
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Newmont and Hyundai is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Corp and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Newmont Corp 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 Newmont 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 Newmont Corp i.e., Newmont Corp and Hyundai go up and down completely randomly.
Pair Corralation between Newmont Corp and Hyundai
Assuming the 90 days trading horizon Newmont Corp is expected to under-perform the Hyundai. In addition to that, Newmont Corp is 1.15 times more volatile than Hyundai Motor. It trades about -0.18 of its total potential returns per unit of risk. Hyundai Motor is currently generating about -0.14 per unit of volatility. If you would invest 6,340 in Hyundai Motor on October 8, 2024 and sell it today you would lose (1,060) from holding Hyundai Motor or give up 16.72% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 86.89% |
Values | Daily Returns |
Newmont Corp vs. Hyundai Motor
Performance |
Timeline |
Newmont Corp |
Hyundai Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Newmont Corp and Hyundai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Newmont Corp and Hyundai
The main advantage of trading using opposite Newmont Corp and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Corp 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.Newmont Corp vs. Mobius Investment Trust | Newmont Corp vs. Medical Properties Trust | Newmont Corp vs. Flow Traders NV | Newmont Corp vs. Vietnam Enterprise Investments |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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