Correlation Between Hyundai and NAVER Corp

Can any of the company-specific risk be diversified away by investing in both Hyundai and NAVER Corp 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 NAVER Corp 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 NAVER Corp, you can compare the effects of market volatilities on Hyundai and NAVER Corp 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 NAVER Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and NAVER Corp.

Diversification Opportunities for Hyundai and NAVER Corp

0.0

Correlation Coefficient

Hyundai  NAVER Corp

Pay attention - limited upside

The 3 months correlation between Hyundai and NAVER is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and NAVER Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAVER Corp 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 NAVER Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAVER Corp has no effect on the direction of Hyundai i.e., Hyundai and NAVER Corp go up and down completely randomly.

Pair Corralation between Hyundai and NAVER Corp

If you would invest  11,500  in NAVER Corp on September 12, 2024 and sell it today you would earn a total of  0.00  from holding NAVER Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hyundai Motor Co  vs.  NAVER Corp

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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

NAVER Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NAVER Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, NAVER Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Hyundai and NAVER Corp

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

The idea behind Hyundai Motor Co and NAVER Corp 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.