Correlation Between Stellantis and Hino Motors
Can any of the company-specific risk be diversified away by investing in both Stellantis and Hino Motors 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 Stellantis and Hino Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellantis NV and Hino Motors Ltd, you can compare the effects of market volatilities on Stellantis and Hino Motors 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 Stellantis with a short position of Hino Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellantis and Hino Motors.
Diversification Opportunities for Stellantis and Hino Motors
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stellantis and Hino is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Stellantis NV and Hino Motors Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hino Motors and Stellantis 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 Stellantis NV are associated (or correlated) with Hino Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hino Motors has no effect on the direction of Stellantis i.e., Stellantis and Hino Motors go up and down completely randomly.
Pair Corralation between Stellantis and Hino Motors
Given the investment horizon of 90 days Stellantis NV is expected to generate 1.03 times more return on investment than Hino Motors. However, Stellantis is 1.03 times more volatile than Hino Motors Ltd. It trades about -0.01 of its potential returns per unit of risk. Hino Motors Ltd is currently generating about -0.05 per unit of risk. If you would invest 1,526 in Stellantis NV on August 31, 2024 and sell it today you would lose (247.00) from holding Stellantis NV or give up 16.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stellantis NV vs. Hino Motors Ltd
Performance |
| Timeline |
| Stellantis NV |
| Hino Motors |
Stellantis and Hino Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellantis and Hino Motors
The main advantage of trading using opposite Stellantis and Hino Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellantis position performs unexpectedly, Hino Motors 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 Hino Motors will offset losses from the drop in Hino Motors' long position.| Stellantis vs. Tesla Inc | Stellantis vs. Li Auto | Stellantis vs. Rivian Automotive | Stellantis vs. Lucid Group |
| Hino Motors vs. Volkswagen AG 110 | Hino Motors vs. Stellantis NV | Hino Motors vs. Toyota Motor | Hino Motors vs. Honda Motor Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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