Correlation Between Hyundai and Systemair
Can any of the company-specific risk be diversified away by investing in both Hyundai and Systemair 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 Systemair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Systemair AB, you can compare the effects of market volatilities on Hyundai and Systemair 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 Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Systemair.
Diversification Opportunities for Hyundai and Systemair
Good diversification
The 3 months correlation between Hyundai and Systemair is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB 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 Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of Hyundai i.e., Hyundai and Systemair go up and down completely randomly.
Pair Corralation between Hyundai and Systemair
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 1.0 times more return on investment than Systemair. However, Hyundai Motor is 1.0 times less risky than Systemair. It trades about 0.08 of its potential returns per unit of risk. Systemair AB is currently generating about 0.03 per unit of risk. If you would invest 2,505 in Hyundai Motor on August 25, 2024 and sell it today you would earn a total of 2,995 from holding Hyundai Motor or generate 119.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Hyundai Motor vs. Systemair AB
Performance |
| Timeline |
| Hyundai Motor |
| Systemair AB |
Hyundai and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Systemair
The main advantage of trading using opposite Hyundai and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Systemair 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 Systemair will offset losses from the drop in Systemair's long position.| Hyundai vs. Vitec Software Group | Hyundai vs. Take Two Interactive Software | Hyundai vs. Planet Fitness Cl | Hyundai vs. Optima Health plc |
| Systemair vs. Samsung Electronics Co | Systemair vs. Samsung Electronics Co | Systemair vs. Hyundai Motor | Systemair vs. Toyota Motor Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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