Correlation Between Hyundai and SMCoreInc
Can any of the company-specific risk be diversified away by investing in both Hyundai and SMCoreInc 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 SMCoreInc 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 SMCoreInc, you can compare the effects of market volatilities on Hyundai and SMCoreInc 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 SMCoreInc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and SMCoreInc.
Diversification Opportunities for Hyundai and SMCoreInc
Very weak diversification
The 3 months correlation between Hyundai and SMCoreInc is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and SMCoreInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMCoreInc 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 SMCoreInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMCoreInc has no effect on the direction of Hyundai i.e., Hyundai and SMCoreInc go up and down completely randomly.
Pair Corralation between Hyundai and SMCoreInc
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 0.77 times more return on investment than SMCoreInc. However, Hyundai Motor Co is 1.3 times less risky than SMCoreInc. It trades about -0.06 of its potential returns per unit of risk. SMCoreInc is currently generating about -0.38 per unit of risk. If you would invest 16,470,000 in Hyundai Motor Co on September 3, 2024 and sell it today you would lose (450,000) from holding Hyundai Motor Co or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. SMCoreInc
Performance |
| Timeline |
| Hyundai Motor |
| SMCoreInc |
Hyundai and SMCoreInc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and SMCoreInc
The main advantage of trading using opposite Hyundai and SMCoreInc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, SMCoreInc 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 SMCoreInc will offset losses from the drop in SMCoreInc's long position.| Hyundai vs. Kaonmedia Co | Hyundai vs. GS Retail Co | Hyundai vs. TK Chemical | Hyundai vs. Next Entertainment World |
| SMCoreInc vs. LG Display | SMCoreInc vs. Hyundai Motor | SMCoreInc vs. Hyundai Motor Co | SMCoreInc vs. Hyundai Motor 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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