Correlation Between Hanwha InvestmentSecuri and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both Hanwha InvestmentSecuri and Samsung SDI 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 Hanwha InvestmentSecuri and Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha InvestmentSecurities Co and Samsung SDI, you can compare the effects of market volatilities on Hanwha InvestmentSecuri and Samsung SDI 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 Hanwha InvestmentSecuri with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha InvestmentSecuri and Samsung SDI.
Diversification Opportunities for Hanwha InvestmentSecuri and Samsung SDI
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hanwha and Samsung is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha InvestmentSecurities Co and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI and Hanwha InvestmentSecuri 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 Hanwha InvestmentSecurities Co are associated (or correlated) with Samsung SDI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung SDI has no effect on the direction of Hanwha InvestmentSecuri i.e., Hanwha InvestmentSecuri and Samsung SDI go up and down completely randomly.
Pair Corralation between Hanwha InvestmentSecuri and Samsung SDI
Assuming the 90 days trading horizon Hanwha InvestmentSecurities Co is expected to generate 1.8 times more return on investment than Samsung SDI. However, Hanwha InvestmentSecuri is 1.8 times more volatile than Samsung SDI. It trades about 0.04 of its potential returns per unit of risk. Samsung SDI is currently generating about -0.06 per unit of risk. If you would invest 510,881 in Hanwha InvestmentSecurities Co on September 5, 2024 and sell it today you would earn a total of 289,119 from holding Hanwha InvestmentSecurities Co or generate 56.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha InvestmentSecurities Co vs. Samsung SDI
Performance |
| Timeline |
| Hanwha InvestmentSecuri |
| Samsung SDI |
Hanwha InvestmentSecuri and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha InvestmentSecuri and Samsung SDI
The main advantage of trading using opposite Hanwha InvestmentSecuri and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha InvestmentSecuri position performs unexpectedly, Samsung SDI 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 SDI will offset losses from the drop in Samsung SDI's long position.The idea behind Hanwha InvestmentSecurities Co and Samsung SDI 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.| Samsung SDI vs. Pureun Mutual Savings | Samsung SDI vs. Daelim Trading Co | Samsung SDI vs. Polaris Office Corp | Samsung SDI vs. SBI Investment KOREA |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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