Correlation Between Polestar Automotive and Hyundai
Can any of the company-specific risk be diversified away by investing in both Polestar Automotive and Hyundai 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 Polestar Automotive and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polestar Automotive Holding and Hyundai Motor Co, you can compare the effects of market volatilities on Polestar Automotive and Hyundai 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 Polestar Automotive with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polestar Automotive and Hyundai.
Diversification Opportunities for Polestar Automotive and Hyundai
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Polestar and Hyundai is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Polestar Automotive Holding and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Polestar Automotive 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 Polestar Automotive Holding are associated (or correlated) with Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of Polestar Automotive i.e., Polestar Automotive and Hyundai go up and down completely randomly.
Pair Corralation between Polestar Automotive and Hyundai
Assuming the 90 days horizon Polestar Automotive Holding is expected to under-perform the Hyundai. In addition to that, Polestar Automotive is 3.45 times more volatile than Hyundai Motor Co. It trades about -0.02 of its total potential returns per unit of risk. Hyundai Motor Co is currently generating about 0.07 per unit of volatility. If you would invest 2,772 in Hyundai Motor Co on August 28, 2024 and sell it today you would earn a total of 2,703 from holding Hyundai Motor Co or generate 97.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polestar Automotive Holding vs. Hyundai Motor Co
Performance |
| Timeline |
| Polestar Automotive |
| Hyundai Motor |
Polestar Automotive and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polestar Automotive and Hyundai
The main advantage of trading using opposite Polestar Automotive and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polestar Automotive position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| Polestar Automotive vs. Lucid Group | Polestar Automotive vs. Canoo Inc | Polestar Automotive vs. Rivian Automotive | Polestar Automotive vs. Aston Martin Lagonda |
| Hyundai vs. Isuzu Motors | Hyundai vs. Renault SA | Hyundai vs. Toyota Motor Corp | Hyundai vs. Porsche Automobile Holding |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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