Correlation Between Hyundai and SEB SA
Can any of the company-specific risk be diversified away by investing in both Hyundai and SEB SA 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 SEB SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and SEB SA, you can compare the effects of market volatilities on Hyundai and SEB SA 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 SEB SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and SEB SA.
Diversification Opportunities for Hyundai and SEB SA
Very weak diversification
The 3 months correlation between Hyundai and SEB is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and SEB SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEB SA 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 SEB SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEB SA has no effect on the direction of Hyundai i.e., Hyundai and SEB SA go up and down completely randomly.
Pair Corralation between Hyundai and SEB SA
Assuming the 90 days trading horizon Hyundai Motor is expected to generate 1.23 times more return on investment than SEB SA. However, Hyundai is 1.23 times more volatile than SEB SA. It trades about -0.03 of its potential returns per unit of risk. SEB SA is currently generating about -0.05 per unit of risk. If you would invest 5,500 in Hyundai Motor on September 12, 2024 and sell it today you would lose (120.00) from holding Hyundai Motor or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. SEB SA
Performance |
| Timeline |
| Hyundai Motor |
| SEB SA |
Hyundai and SEB SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and SEB SA
The main advantage of trading using opposite Hyundai and SEB SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, SEB SA 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 SEB SA will offset losses from the drop in SEB SA's long position.| Hyundai vs. Fonix Mobile plc | Hyundai vs. Worldwide Healthcare Trust | Hyundai vs. Omega Healthcare Investors | Hyundai vs. PureTech Health plc |
| SEB SA vs. JD Sports Fashion | SEB SA vs. Charter Communications Cl | SEB SA vs. TechnipFMC PLC | SEB SA vs. Albion Technology General |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |