Correlation Between Samsung Electronics and HMM
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and HMM 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 HMM 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 HMM Co, you can compare the effects of market volatilities on Samsung Electronics and HMM 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 HMM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and HMM.
Diversification Opportunities for Samsung Electronics and HMM
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and HMM is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and HMM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMM Co 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 HMM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMM Co has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and HMM go up and down completely randomly.
Pair Corralation between Samsung Electronics and HMM
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 2.55 times less return on investment than HMM. In addition to that, Samsung Electronics is 1.19 times more volatile than HMM Co. It trades about 0.1 of its total potential returns per unit of risk. HMM Co is currently generating about 0.3 per unit of volatility. If you would invest 1,602,000 in HMM Co on September 13, 2024 and sell it today you would earn a total of 261,000 from holding HMM Co or generate 16.29% 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. HMM Co
Performance |
| Timeline |
| Samsung Electronics |
| HMM Co |
Samsung Electronics and HMM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and HMM
The main advantage of trading using opposite Samsung Electronics and HMM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, HMM 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 HMM will offset losses from the drop in HMM's long position.| Samsung Electronics vs. Anam Electronics Co | Samsung Electronics vs. Daejoo Electronic Materials | Samsung Electronics vs. CG Hi Tech | Samsung Electronics vs. Samsung Electronics Co |
| HMM vs. Korea New Network | HMM vs. Solution Advanced Technology | HMM vs. Busan Industrial Co | HMM vs. Busan Ind |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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