Correlation Between Hyundai and Sealed Air
Can any of the company-specific risk be diversified away by investing in both Hyundai and Sealed Air 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 Sealed Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Sealed Air Corp, you can compare the effects of market volatilities on Hyundai and Sealed Air 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 Sealed Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Sealed Air.
Diversification Opportunities for Hyundai and Sealed Air
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and Sealed is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Sealed Air Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sealed Air Corp 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 Sealed Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sealed Air Corp has no effect on the direction of Hyundai i.e., Hyundai and Sealed Air go up and down completely randomly.
Pair Corralation between Hyundai and Sealed Air
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the Sealed Air. In addition to that, Hyundai is 2.41 times more volatile than Sealed Air Corp. It trades about -0.06 of its total potential returns per unit of risk. Sealed Air Corp is currently generating about -0.08 per unit of volatility. If you would invest 3,668 in Sealed Air Corp on August 29, 2024 and sell it today you would lose (78.00) from holding Sealed Air Corp or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hyundai Motor vs. Sealed Air Corp
Performance |
| Timeline |
| Hyundai Motor |
| Sealed Air Corp |
Hyundai and Sealed Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Sealed Air
The main advantage of trading using opposite Hyundai and Sealed Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Sealed Air 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 Sealed Air will offset losses from the drop in Sealed Air's long position.| Hyundai vs. MG Plc | Hyundai vs. Admiral Group PLC | Hyundai vs. Anglo American PLC | Hyundai vs. Vodafone Group PLC |
| Sealed Air vs. Samsung Electronics Co | Sealed Air vs. Samsung Electronics Co | Sealed Air vs. Hyundai Motor | Sealed Air 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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