Correlation Between Hanjin Transportation and Samsung Life
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Samsung Life 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 Hanjin Transportation and Samsung Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjin Transportation Co and Samsung Life, you can compare the effects of market volatilities on Hanjin Transportation and Samsung Life 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 Hanjin Transportation with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Samsung Life.
Diversification Opportunities for Hanjin Transportation and Samsung Life
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanjin and Samsung is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Samsung Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life and Hanjin Transportation 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 Hanjin Transportation Co are associated (or correlated) with Samsung Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Life has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Samsung Life go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Samsung Life
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to under-perform the Samsung Life. But the stock apears to be less risky and, when comparing its historical volatility, Hanjin Transportation Co is 1.79 times less risky than Samsung Life. The stock trades about -0.07 of its potential returns per unit of risk. The Samsung Life is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 8,140,000 in Samsung Life on November 3, 2024 and sell it today you would earn a total of 770,000 from holding Samsung Life or generate 9.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. Samsung Life
Performance |
| Timeline |
| Hanjin Transportation |
| Samsung Life |
Hanjin Transportation and Samsung Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Samsung Life
The main advantage of trading using opposite Hanjin Transportation and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Samsung Life 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 Samsung Life will offset losses from the drop in Samsung Life's long position.| Hanjin Transportation vs. KG Eco Technology | Hanjin Transportation vs. Infinitt Healthcare Co | Hanjin Transportation vs. SK Chemicals Co | Hanjin Transportation vs. Bosung Power Technology |
| Samsung Life vs. Hanwha Life Insurance | Samsung Life vs. Dongbu Insurance Co | Samsung Life vs. Iljin Display | Samsung Life vs. LG Display 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |