Correlation Between Hyundai and Epwin Group

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

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

Diversification Opportunities for Hyundai and Epwin Group

0.07

Correlation Coefficient

Hyundai  Epwin Group

Significant diversification

The 3 months correlation between Hyundai and Epwin is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Epwin Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epwin Group PLC 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 Epwin Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epwin Group PLC has no effect on the direction of Hyundai i.e., Hyundai and Epwin Group go up and down completely randomly.

Pair Corralation between Hyundai and Epwin Group

Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the Epwin Group. In addition to that, Hyundai is 1.78 times more volatile than Epwin Group PLC. It trades about -0.14 of its total potential returns per unit of risk. Epwin Group PLC is currently generating about -0.11 per unit of volatility. If you would invest  10,600  in Epwin Group PLC on September 26, 2024 and sell it today you would lose (1,000.00) from holding Epwin Group PLC or give up 9.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Hyundai Motor  vs.  Epwin Group PLC

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.

Epwin Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Epwin Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Pair Trading with Hyundai and Epwin Group

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

The idea behind Hyundai Motor and Epwin Group 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.