Correlation Between Air Transport and Hyundai
Can any of the company-specific risk be diversified away by investing in both Air Transport 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 Air Transport and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Transport Services and Hyundai Motor, you can compare the effects of market volatilities on Air Transport 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 Air Transport with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and Hyundai.
Diversification Opportunities for Air Transport and Hyundai
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Hyundai is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Air Transport 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 Air Transport Services 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 Air Transport i.e., Air Transport and Hyundai go up and down completely randomly.
Pair Corralation between Air Transport and Hyundai
Assuming the 90 days horizon Air Transport Services is expected to generate 0.29 times more return on investment than Hyundai. However, Air Transport Services is 3.45 times less risky than Hyundai. It trades about 0.08 of its potential returns per unit of risk. Hyundai Motor is currently generating about -0.19 per unit of risk. If you would invest 2,080 in Air Transport Services on September 22, 2024 and sell it today you would earn a total of 20.00 from holding Air Transport Services or generate 0.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Air Transport Services vs. Hyundai Motor
Performance |
Timeline |
Air Transport Services |
Hyundai Motor |
Air Transport and Hyundai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air Transport and Hyundai
The main advantage of trading using opposite Air Transport and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport 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.Air Transport vs. Airports of Thailand | Air Transport vs. Airports of Thailand | Air Transport vs. Aena SME SA | Air Transport vs. AENA SME UNSPADR110 |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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