Correlation Between DISTRICT METALS and Hyundai

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

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

Diversification Opportunities for DISTRICT METALS and Hyundai

0.2

Correlation Coefficient

DISTRICT METALS  Hyundai

Modest diversification

The 3 months correlation between DISTRICT and Hyundai is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding DISTRICT METALS and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and DISTRICT 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 DISTRICT METALS 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 DISTRICT METALS i.e., DISTRICT METALS and Hyundai go up and down completely randomly.

Pair Corralation between DISTRICT METALS and Hyundai

If you would invest  24.00  in DISTRICT METALS on October 22, 2024 and sell it today you would earn a total of  1.00  from holding DISTRICT METALS or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

DISTRICT METALS  vs.  Hyundai Motor

DISTRICT METALS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DISTRICT METALS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, DISTRICT METALS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the 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. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with DISTRICT METALS and Hyundai

The main advantage of trading using opposite DISTRICT METALS and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DISTRICT 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.

The idea behind DISTRICT METALS 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.