Correlation Between Hyundai Mobis and Next Entertainment
Can any of the company-specific risk be diversified away by investing in both Hyundai Mobis and Next Entertainment 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 Mobis and Next Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Mobis and Next Entertainment World, you can compare the effects of market volatilities on Hyundai Mobis and Next Entertainment 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 Mobis with a short position of Next Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Mobis and Next Entertainment.
Diversification Opportunities for Hyundai Mobis and Next Entertainment
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Next is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Mobis and Next Entertainment World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Entertainment World and Hyundai Mobis 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 Mobis are associated (or correlated) with Next Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Entertainment World has no effect on the direction of Hyundai Mobis i.e., Hyundai Mobis and Next Entertainment go up and down completely randomly.
Pair Corralation between Hyundai Mobis and Next Entertainment
Assuming the 90 days trading horizon Hyundai Mobis is expected to generate 0.56 times more return on investment than Next Entertainment. However, Hyundai Mobis is 1.78 times less risky than Next Entertainment. It trades about 0.07 of its potential returns per unit of risk. Next Entertainment World is currently generating about -0.01 per unit of risk. If you would invest 22,700,000 in Hyundai Mobis on September 26, 2024 and sell it today you would earn a total of 1,600,000 from holding Hyundai Mobis or generate 7.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hyundai Mobis vs. Next Entertainment World
Performance |
Timeline |
Hyundai Mobis |
Next Entertainment World |
Hyundai Mobis and Next Entertainment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hyundai Mobis and Next Entertainment
The main advantage of trading using opposite Hyundai Mobis and Next Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Mobis position performs unexpectedly, Next Entertainment 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 Next Entertainment will offset losses from the drop in Next Entertainment's long position.Hyundai Mobis vs. Woori Technology Investment | Hyundai Mobis vs. Samsung Card Co | Hyundai Mobis vs. Korea Real Estate | Hyundai Mobis vs. CHOROKBAEM PANY Co |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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