Correlation Between Hyundai and Samsung Biologics
Can any of the company-specific risk be diversified away by investing in both Hyundai and Samsung Biologics 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 Samsung Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor Co and Samsung Biologics Co, you can compare the effects of market volatilities on Hyundai and Samsung Biologics 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 Samsung Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and Samsung Biologics.
Diversification Opportunities for Hyundai and Samsung Biologics
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hyundai and Samsung is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor Co and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics 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 Co are associated (or correlated) with Samsung Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Biologics has no effect on the direction of Hyundai i.e., Hyundai and Samsung Biologics go up and down completely randomly.
Pair Corralation between Hyundai and Samsung Biologics
Assuming the 90 days trading horizon Hyundai Motor Co is expected to generate 1.5 times more return on investment than Samsung Biologics. However, Hyundai is 1.5 times more volatile than Samsung Biologics Co. It trades about -0.08 of its potential returns per unit of risk. Samsung Biologics Co is currently generating about -0.12 per unit of risk. If you would invest 18,120,000 in Hyundai Motor Co on August 28, 2024 and sell it today you would lose (1,100,000) from holding Hyundai Motor Co or give up 6.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Motor Co vs. Samsung Biologics Co
Performance |
| Timeline |
| Hyundai Motor |
| Samsung Biologics |
Hyundai and Samsung Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and Samsung Biologics
The main advantage of trading using opposite Hyundai and Samsung Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai position performs unexpectedly, Samsung Biologics 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 Biologics will offset losses from the drop in Samsung Biologics' long position.| Hyundai vs. Lake Materials Co | Hyundai vs. KB Financial Group | Hyundai vs. Jeju Air Co | Hyundai vs. LAKE MATERIALS LTD |
| Samsung Biologics vs. Hanjin Transportation Co | Samsung Biologics vs. Daekyung Machinery Engineering | Samsung Biologics vs. Hana Technology Co | Samsung Biologics vs. Alton Sports CoLtd |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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