Correlation Between MOVIE GAMES and Hyundai

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

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

Diversification Opportunities for MOVIE GAMES and Hyundai

0.75

Correlation Coefficient

MOVIE GAMES  Hyundai

Poor diversification

The 3 months correlation between MOVIE and Hyundai is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and MOVIE GAMES 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 MOVIE GAMES SA 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 MOVIE GAMES i.e., MOVIE GAMES and Hyundai go up and down completely randomly.

Pair Corralation between MOVIE GAMES and Hyundai

Assuming the 90 days horizon MOVIE GAMES SA is expected to generate 2.52 times more return on investment than Hyundai. However, MOVIE GAMES is 2.52 times more volatile than Hyundai Motor. It trades about 0.07 of its potential returns per unit of risk. Hyundai Motor is currently generating about -0.31 per unit of risk. If you would invest  348.00  in MOVIE GAMES SA on October 3, 2024 and sell it today you would earn a total of  18.00  from holding MOVIE GAMES SA or generate 5.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	78.95%
Values	Daily Returns

MOVIE GAMES SA  vs.  Hyundai Motor

MOVIE GAMES SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MOVIE GAMES SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with MOVIE GAMES and Hyundai

The main advantage of trading using opposite MOVIE GAMES and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOVIE GAMES 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 MOVIE GAMES SA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.