Correlation Between Samsung Electronics and Hanwha InvestmentSecuri
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri 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 Hanwha InvestmentSecurities Co, you can compare the effects of market volatilities on Samsung Electronics and Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Hanwha InvestmentSecuri.
Diversification Opportunities for Samsung Electronics and Hanwha InvestmentSecuri
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Hanwha is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Hanwha InvestmentSecurities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha InvestmentSecuri has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Hanwha InvestmentSecuri go up and down completely randomly.
Pair Corralation between Samsung Electronics and Hanwha InvestmentSecuri
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Hanwha InvestmentSecuri. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.66 times less risky than Hanwha InvestmentSecuri. The stock trades about -0.11 of its potential returns per unit of risk. The Hanwha InvestmentSecurities Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 362,000 in Hanwha InvestmentSecurities Co on September 3, 2024 and sell it today you would lose (8,500) from holding Hanwha InvestmentSecurities Co or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Hanwha InvestmentSecurities Co
Performance |
| Timeline |
| Samsung Electronics |
| Hanwha InvestmentSecuri |
Samsung Electronics and Hanwha InvestmentSecuri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Hanwha InvestmentSecuri
The main advantage of trading using opposite Samsung Electronics and Hanwha InvestmentSecuri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri will offset losses from the drop in Hanwha InvestmentSecuri's long position.| Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. UNISEM Co | Samsung Electronics vs. RPBio Inc | Samsung Electronics vs. Finebesteel |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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