Correlation Between Samsung Electronics and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Heungkuk Metaltech 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 Electronics and Heungkuk Metaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on Samsung Electronics and Heungkuk Metaltech 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 Electronics with a short position of Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Heungkuk Metaltech.
Diversification Opportunities for Samsung Electronics and Heungkuk Metaltech
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Heungkuk is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd and Samsung Electronics 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 Electronics Co are associated (or correlated) with Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between Samsung Electronics and Heungkuk Metaltech
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Heungkuk Metaltech. In addition to that, Samsung Electronics is 1.22 times more volatile than Heungkuk Metaltech CoLtd. It trades about -0.25 of its total potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about 0.02 per unit of volatility. If you would invest 518,000 in Heungkuk Metaltech CoLtd on November 5, 2024 and sell it today you would earn a total of 1,000.00 from holding Heungkuk Metaltech CoLtd or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Heungkuk Metaltech CoLtd
Performance |
| Timeline |
| Samsung Electronics |
| Heungkuk Metaltech CoLtd |
Samsung Electronics and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Heungkuk Metaltech
The main advantage of trading using opposite Samsung Electronics and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.| Samsung Electronics vs. V One Tech Co | Samsung Electronics vs. SK Chemicals Co | Samsung Electronics vs. PNC Technologies co | Samsung Electronics vs. Mgame Corp |
| Heungkuk Metaltech vs. Hankook Furniture Co | Heungkuk Metaltech vs. Hanjoo Light Metal | Heungkuk Metaltech vs. Korea Information Engineering | Heungkuk Metaltech vs. NICE Information Service |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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