Correlation Between Hyundai and Grayscale Filecoin

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

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

Diversification Opportunities for Hyundai and Grayscale Filecoin

-0.47

Correlation Coefficient

Hyundai  Grayscale Filecoin

Very good diversification

The 3 months correlation between Hyundai and Grayscale is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Grayscale Filecoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Filecoin Trust and Hyundai 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 Motor Co are associated (or correlated) with Grayscale Filecoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Filecoin Trust has no effect on the direction of Hyundai i.e., Hyundai and Grayscale Filecoin go up and down completely randomly.

Pair Corralation between Hyundai and Grayscale Filecoin

Assuming the 90 days horizon Hyundai is expected to generate 3.74 times less return on investment than Grayscale Filecoin. But when comparing it to its historical volatility, Hyundai Motor Co is 3.67 times less risky than Grayscale Filecoin. It trades about 0.06 of its potential returns per unit of risk. Grayscale Filecoin Trust is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  6,900  in Grayscale Filecoin Trust on October 10, 2024 and sell it today you would earn a total of  101.00  from holding Grayscale Filecoin Trust or generate 1.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hyundai Motor Co  vs.  Grayscale Filecoin Trust

Hyundai Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hyundai Motor Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak 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.

Grayscale Filecoin Trust

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Filecoin Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting essential indicators, Grayscale Filecoin reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hyundai and Grayscale Filecoin

The main advantage of trading using opposite Hyundai and Grayscale Filecoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Grayscale Filecoin 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 Grayscale Filecoin will offset losses from the drop in Grayscale Filecoin's long position.

The idea behind Hyundai Motor Co and Grayscale Filecoin Trust 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.