Correlation Between Samsung Electronics and Hyundai Elevator
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Hyundai Elevator 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 Hyundai Elevator 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 Hyundai Elevator, you can compare the effects of market volatilities on Samsung Electronics and Hyundai Elevator 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 Hyundai Elevator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Hyundai Elevator.
Diversification Opportunities for Samsung Electronics and Hyundai Elevator
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Hyundai is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Hyundai Elevator in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Elevator 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 Hyundai Elevator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Elevator has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Hyundai Elevator go up and down completely randomly.
Pair Corralation between Samsung Electronics and Hyundai Elevator
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Hyundai Elevator. In addition to that, Samsung Electronics is 1.08 times more volatile than Hyundai Elevator. It trades about -0.1 of its total potential returns per unit of risk. Hyundai Elevator is currently generating about 0.25 per unit of volatility. If you would invest 4,590,000 in Hyundai Elevator on September 2, 2024 and sell it today you would earn a total of 700,000 from holding Hyundai Elevator or generate 15.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Hyundai Elevator
Performance |
| Timeline |
| Samsung Electronics |
| Hyundai Elevator |
Samsung Electronics and Hyundai Elevator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Hyundai Elevator
The main advantage of trading using opposite Samsung Electronics and Hyundai Elevator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Hyundai Elevator 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 Hyundai Elevator will offset losses from the drop in Hyundai Elevator's long position.| Samsung Electronics vs. Polaris Office Corp | Samsung Electronics vs. Lotte Data Communication | Samsung Electronics vs. Hankook Furniture Co | Samsung Electronics vs. Daou Data Corp |
| Hyundai Elevator vs. Korea New Network | Hyundai Elevator vs. ICD Co | Hyundai Elevator vs. DYPNF CoLtd | Hyundai Elevator vs. Busan Industrial 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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