Correlation Between Hyundai and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both Hyundai and Veolia Environnement 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 Veolia Environnement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and Veolia Environnement VE, you can compare the effects of market volatilities on Hyundai and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Veolia Environnement.
Diversification Opportunities for Hyundai and Veolia Environnement
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hyundai and Veolia is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Veolia Environnement VE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of Hyundai i.e., Hyundai and Veolia Environnement go up and down completely randomly.
Pair Corralation between Hyundai and Veolia Environnement
Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the Veolia Environnement. In addition to that, Hyundai is 2.07 times more volatile than Veolia Environnement VE. It trades about -0.15 of its total potential returns per unit of risk. Veolia Environnement VE is currently generating about -0.13 per unit of volatility. If you would invest 2,995 in Veolia Environnement VE on August 25, 2024 and sell it today you would lose (214.00) from holding Veolia Environnement VE or give up 7.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor vs. Veolia Environnement VE
Performance |
| Timeline |
| Hyundai Motor |
| Veolia Environnement |
Hyundai and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Veolia Environnement
The main advantage of trading using opposite Hyundai and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.| Hyundai vs. Vitec Software Group | Hyundai vs. Take Two Interactive Software | Hyundai vs. Planet Fitness Cl | Hyundai vs. Optima Health plc |
| Veolia Environnement vs. Samsung Electronics Co | Veolia Environnement vs. Samsung Electronics Co | Veolia Environnement vs. Hyundai Motor | Veolia Environnement 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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