Correlation Between Samsung Fire and Hyosung Advanced
Can any of the company-specific risk be diversified away by investing in both Samsung Fire and Hyosung Advanced 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 Samsung Fire and Hyosung Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Fire Marine and Hyosung Advanced Materials, you can compare the effects of market volatilities on Samsung Fire and Hyosung Advanced 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 Samsung Fire with a short position of Hyosung Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Fire and Hyosung Advanced.
Diversification Opportunities for Samsung Fire and Hyosung Advanced
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Hyosung is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Fire Marine and Hyosung Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Advanced Mat and Samsung Fire 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 Samsung Fire Marine are associated (or correlated) with Hyosung Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Advanced Mat has no effect on the direction of Samsung Fire i.e., Samsung Fire and Hyosung Advanced go up and down completely randomly.
Pair Corralation between Samsung Fire and Hyosung Advanced
Assuming the 90 days trading horizon Samsung Fire Marine is expected to generate 1.06 times more return on investment than Hyosung Advanced. However, Samsung Fire is 1.06 times more volatile than Hyosung Advanced Materials. It trades about 0.06 of its potential returns per unit of risk. Hyosung Advanced Materials is currently generating about -0.09 per unit of risk. If you would invest 24,135,600 in Samsung Fire Marine on September 12, 2024 and sell it today you would earn a total of 12,264,400 from holding Samsung Fire Marine or generate 50.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Fire Marine vs. Hyosung Advanced Materials
Performance |
| Timeline |
| Samsung Fire Marine |
| Hyosung Advanced Mat |
Samsung Fire and Hyosung Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Fire and Hyosung Advanced
The main advantage of trading using opposite Samsung Fire and Hyosung Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Fire position performs unexpectedly, Hyosung Advanced 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 Hyosung Advanced will offset losses from the drop in Hyosung Advanced's long position.| Samsung Fire vs. Sangsangin Investment Securities | Samsung Fire vs. Kbi Metal Co | Samsung Fire vs. MetaLabs Co | Samsung Fire vs. Hanjoo Light Metal |
| Hyosung Advanced vs. Solution Advanced Technology | Hyosung Advanced vs. Busan Industrial Co | Hyosung Advanced vs. Busan Ind | Hyosung Advanced vs. Sam Chun Dang |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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