Correlation Between Hyundai and State Street
Can any of the company-specific risk be diversified away by investing in both Hyundai and State Street 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 State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and State Street Corp, you can compare the effects of market volatilities on Hyundai and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and State Street.
Diversification Opportunities for Hyundai and State Street
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hyundai and State is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and State Street Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street 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 are associated (or correlated) with State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Corp has no effect on the direction of Hyundai i.e., Hyundai and State Street go up and down completely randomly.
Pair Corralation between Hyundai and State Street
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the State Street. In addition to that, Hyundai is 2.05 times more volatile than State Street Corp. It trades about -0.08 of its total potential returns per unit of risk. State Street Corp is currently generating about 0.28 per unit of volatility. If you would invest 8,040 in State Street Corp on September 11, 2024 and sell it today you would earn a total of 1,870 from holding State Street Corp or generate 23.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hyundai Motor vs. State Street Corp
Performance |
Timeline |
Hyundai Motor |
State Street Corp |
Hyundai and State Street Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hyundai and State Street
The main advantage of trading using opposite Hyundai and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.Hyundai vs. Fonix Mobile plc | Hyundai vs. Worldwide Healthcare Trust | Hyundai vs. Omega Healthcare Investors | Hyundai vs. PureTech Health plc |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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