Correlation Between Stellantis and Hyundai
Can any of the company-specific risk be diversified away by investing in both Stellantis 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 Stellantis and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellantis NV and Hyundai Motor Co, you can compare the effects of market volatilities on Stellantis 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 Stellantis with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellantis and Hyundai.
Diversification Opportunities for Stellantis and Hyundai
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stellantis and Hyundai is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Stellantis NV and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 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 Stellantis i.e., Stellantis and Hyundai go up and down completely randomly.
Pair Corralation between Stellantis and Hyundai
Given the investment horizon of 90 days Stellantis NV is expected to generate 0.91 times more return on investment than Hyundai. However, Stellantis NV is 1.1 times less risky than Hyundai. It trades about -0.08 of its potential returns per unit of risk. Hyundai Motor Co is currently generating about -0.25 per unit of risk. If you would invest 1,331 in Stellantis NV on August 24, 2024 and sell it today you would lose (46.00) from holding Stellantis NV or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stellantis NV vs. Hyundai Motor Co
Performance |
| Timeline |
| Stellantis NV |
| Hyundai Motor |
Stellantis and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellantis and Hyundai
The main advantage of trading using opposite Stellantis and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellantis 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.| Stellantis vs. Porsche Automobile Holding | Stellantis vs. Toyota Motor | Stellantis vs. Honda Motor Co | Stellantis vs. General Motors |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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