Correlation Between Hyundai and New York

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

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

Diversification Opportunities for Hyundai and New York

-0.58

Correlation Coefficient

Hyundai  New York

Excellent diversification

The 3 months correlation between Hyundai and New is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and The New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York has no effect on the direction of Hyundai i.e., Hyundai and New York go up and down completely randomly.

Pair Corralation between Hyundai and New York

Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the New York. In addition to that, Hyundai is 1.33 times more volatile than The New York. It trades about -0.11 of its total potential returns per unit of risk. The New York is currently generating about 0.05 per unit of volatility. If you would invest  4,856  in The New York on September 23, 2024 and sell it today you would earn a total of  248.00  from holding The New York or generate 5.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.97%
Values	Daily Returns

Hyundai Motor  vs.  The New York

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. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

New York

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The New York are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, New York 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 New York

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

The idea behind Hyundai Motor and The New York 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.