Correlation Between Hyundai and Symphony Environmental

Can any of the company-specific risk be diversified away by investing in both Hyundai and Symphony Environmental 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 Symphony Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hyundai Motor and Symphony Environmental Technologies, you can compare the effects of market volatilities on Hyundai and Symphony Environmental 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 Symphony Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Symphony Environmental.

Diversification Opportunities for Hyundai and Symphony Environmental

0.78

Correlation Coefficient

Hyundai  Symphony Environmental

Poor diversification

The 3 months correlation between Hyundai and Symphony is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor and Symphony Environmental Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symphony Environmental 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 Symphony Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symphony Environmental has no effect on the direction of Hyundai i.e., Hyundai and Symphony Environmental go up and down completely randomly.

Pair Corralation between Hyundai and Symphony Environmental

Assuming the 90 days trading horizon Hyundai Motor is expected to under-perform the Symphony Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Motor is 2.19 times less risky than Symphony Environmental. The stock trades about -0.05 of its potential returns per unit of risk. The Symphony Environmental Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  275.00  in Symphony Environmental Technologies on October 4, 2024 and sell it today you would earn a total of  15.00  from holding Symphony Environmental Technologies or generate 5.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.4%
Values	Daily Returns

Hyundai Motor  vs.  Symphony Environmental Technol

Hyundai Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hyundai Motor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Symphony Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Symphony Environmental Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Hyundai and Symphony Environmental

The main advantage of trading using opposite Hyundai and Symphony Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Symphony Environmental 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 Symphony Environmental will offset losses from the drop in Symphony Environmental's long position.

The idea behind Hyundai Motor and Symphony Environmental Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.