Correlation Between IPower and Hyundai

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

Diversification Opportunities for IPower and Hyundai

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between IPower and Hyundai is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding IPower Inc and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and IPower 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 IPower Inc are associated (or correlated) with Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of IPower i.e., IPower and Hyundai go up and down completely randomly.

Pair Corralation between IPower and Hyundai

Considering the 90-day investment horizon IPower Inc is expected to under-perform the Hyundai. In addition to that, IPower is 2.49 times more volatile than Hyundai Motor Co. It trades about -0.06 of its total potential returns per unit of risk. Hyundai Motor Co is currently generating about -0.03 per unit of volatility. If you would invest  3,913  in Hyundai Motor Co on September 3, 2022 and sell it today you would lose (788.00)  from holding Hyundai Motor Co or give up 20.14% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

IPower Inc  vs.  Hyundai Motor Co

 Performance (%) 
       Timeline  
IPower Inc 
IPower Performance
0 of 100
Over the last 90 days IPower Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of sluggish performance in the last few months, the Etf's basic indicators remain fairly stable which may send shares a bit higher in January 2023. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

IPower Price Channel

Hyundai Motor 
Hyundai Performance
0 of 100
Over the last 90 days Hyundai Motor Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Hyundai is not utilizing all of its potentials. The new stock price tumult, may contribute to shorter-term losses for the shareholders.

Hyundai Price Channel

IPower and Hyundai Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IPower and Hyundai

The main advantage of trading using opposite IPower and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPower position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.
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The idea behind IPower Inc and Hyundai Motor Co 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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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 Bond Directory module to find actively traded corporate debentures issued by US companies.

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