Correlation Between Hyundai and SBI Investment
Can any of the company-specific risk be diversified away by investing in both Hyundai and SBI Investment 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 SBI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor Co and SBI Investment KOREA, you can compare the effects of market volatilities on Hyundai and SBI Investment 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 SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and SBI Investment.
Diversification Opportunities for Hyundai and SBI Investment
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hyundai and SBI is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and SBI Investment KOREA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Investment KOREA 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 Co are associated (or correlated) with SBI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Investment KOREA has no effect on the direction of Hyundai i.e., Hyundai and SBI Investment go up and down completely randomly.
Pair Corralation between Hyundai and SBI Investment
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.58 times more return on investment than SBI Investment. However, Hyundai Motor Co is 1.72 times less risky than SBI Investment. It trades about -0.05 of its potential returns per unit of risk. SBI Investment KOREA is currently generating about -0.04 per unit of risk. If you would invest 17,771,400 in Hyundai Motor Co on September 27, 2024 and sell it today you would lose (2,501,400) from holding Hyundai Motor Co or give up 14.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. SBI Investment KOREA
Performance |
| Timeline |
| Hyundai Motor |
| SBI Investment KOREA |
Hyundai and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and SBI Investment
The main advantage of trading using opposite Hyundai and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, SBI Investment 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 SBI Investment will offset losses from the drop in SBI Investment's long position.| Hyundai vs. Hyundai Motor Co | Hyundai vs. AnterogenCoLtd | Hyundai vs. MEDIPOST Co | Hyundai vs. Gyeongnam Steel Co |
| SBI Investment vs. E Investment Development | SBI Investment vs. TS Investment Corp | SBI Investment vs. Sangsangin Investment Securities | SBI Investment vs. DB Insurance Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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