Correlation Between ADRIATIC METALS and Hyundai
Can any of the company-specific risk be diversified away by investing in both ADRIATIC METALS 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 ADRIATIC METALS and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and Hyundai Motor, you can compare the effects of market volatilities on ADRIATIC METALS 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 ADRIATIC METALS with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and Hyundai.
Diversification Opportunities for ADRIATIC METALS and Hyundai
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ADRIATIC and Hyundai is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and ADRIATIC METALS 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 ADRIATIC METALS LS 013355 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 ADRIATIC METALS i.e., ADRIATIC METALS and Hyundai go up and down completely randomly.
Pair Corralation between ADRIATIC METALS and Hyundai
Assuming the 90 days trading horizon ADRIATIC METALS LS 013355 is expected to under-perform the Hyundai. In addition to that, ADRIATIC METALS is 1.38 times more volatile than Hyundai Motor. It trades about -0.16 of its total potential returns per unit of risk. Hyundai Motor is currently generating about -0.12 per unit of volatility. If you would invest 4,990 in Hyundai Motor on October 8, 2024 and sell it today you would lose (140.00) from holding Hyundai Motor or give up 2.81% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 62.5% |
Values | Daily Returns |
ADRIATIC METALS LS 013355 vs. Hyundai Motor
Performance |
Timeline |
ADRIATIC METALS LS |
Hyundai Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ADRIATIC METALS and Hyundai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ADRIATIC METALS and Hyundai
The main advantage of trading using opposite ADRIATIC METALS and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS 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.ADRIATIC METALS vs. Superior Plus Corp | ADRIATIC METALS vs. NMI Holdings | ADRIATIC METALS vs. SIVERS SEMICONDUCTORS AB | ADRIATIC METALS vs. Talanx AG |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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