Correlation Between Hyundai and Gentex

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

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

Diversification Opportunities for Hyundai and Gentex

-0.18

Correlation Coefficient

Hyundai  Gentex

Good diversification

The 3 months correlation between Hyundai and Gentex is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 are associated (or correlated) with Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Hyundai i.e., Hyundai and Gentex go up and down completely randomly.

Pair Corralation between Hyundai and Gentex

If you would invest  0.00  in Hyundai Motor on October 4, 2024 and sell it today you would earn a total of  0.00  from holding Hyundai Motor or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.3%
Values	Daily Returns

Hyundai Motor  vs.  Gentex

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. 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.

Gentex

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gentex are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Gentex may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Hyundai and Gentex

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

The idea behind Hyundai Motor and Gentex 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.