Correlation Between Hyundai Green and PI Advanced
Can any of the company-specific risk be diversified away by investing in both Hyundai Green and PI Advanced 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 Hyundai Green and PI Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Green Food and PI Advanced Materials, you can compare the effects of market volatilities on Hyundai Green and PI Advanced 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 Hyundai Green with a short position of PI Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Green and PI Advanced.
Diversification Opportunities for Hyundai Green and PI Advanced
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hyundai and 178920 is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Green Food and PI Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PI Advanced Materials and Hyundai Green 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 Hyundai Green Food are associated (or correlated) with PI Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PI Advanced Materials has no effect on the direction of Hyundai Green i.e., Hyundai Green and PI Advanced go up and down completely randomly.
Pair Corralation between Hyundai Green and PI Advanced
Assuming the 90 days trading horizon Hyundai Green Food is expected to generate 0.38 times more return on investment than PI Advanced. However, Hyundai Green Food is 2.61 times less risky than PI Advanced. It trades about 0.11 of its potential returns per unit of risk. PI Advanced Materials is currently generating about -0.05 per unit of risk. If you would invest 1,149,000 in Hyundai Green Food on September 20, 2024 and sell it today you would earn a total of 440,000 from holding Hyundai Green Food or generate 38.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hyundai Green Food vs. PI Advanced Materials
Performance |
Timeline |
Hyundai Green Food |
PI Advanced Materials |
Hyundai Green and PI Advanced Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hyundai Green and PI Advanced
The main advantage of trading using opposite Hyundai Green and PI Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Green position performs unexpectedly, PI Advanced 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 PI Advanced will offset losses from the drop in PI Advanced's long position.Hyundai Green vs. Samsung Electronics Co | Hyundai Green vs. Samsung Electronics Co | Hyundai Green vs. LG Energy Solution | Hyundai Green vs. SK Hynix |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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