Correlation Between Hyundai and Concurrent Technologies

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Can any of the company-specific risk be diversified away by investing in both Hyundai and Concurrent Technologies 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 Concurrent Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Concurrent Technologies Plc, you can compare the effects of market volatilities on Hyundai and Concurrent Technologies 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 Concurrent Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Concurrent Technologies.

Diversification Opportunities for Hyundai and Concurrent Technologies

-0.78
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Hyundai and Concurrent is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Concurrent Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concurrent Technologies 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 Concurrent Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concurrent Technologies has no effect on the direction of Hyundai i.e., Hyundai and Concurrent Technologies go up and down completely randomly.

Pair Corralation between Hyundai and Concurrent Technologies

Assuming the 90 days trading horizon Hyundai is expected to generate 1.7 times less return on investment than Concurrent Technologies. In addition to that, Hyundai is 1.19 times more volatile than Concurrent Technologies Plc. It trades about 0.07 of its total potential returns per unit of risk. Concurrent Technologies Plc is currently generating about 0.14 per unit of volatility. If you would invest  7,082  in Concurrent Technologies Plc on September 12, 2024 and sell it today you would earn a total of  6,668  from holding Concurrent Technologies Plc or generate 94.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Hyundai Motor  vs.  Concurrent Technologies Plc

 Performance 
       Timeline  
Hyundai Motor 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
Concurrent Technologies 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Concurrent Technologies Plc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Concurrent Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hyundai and Concurrent Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hyundai and Concurrent Technologies

The main advantage of trading using opposite Hyundai and Concurrent Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Concurrent Technologies 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 Concurrent Technologies will offset losses from the drop in Concurrent Technologies' long position.
The idea behind Hyundai Motor and Concurrent Technologies Plc 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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