Correlation Between Samsung Electronics and Iljin HySolus
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Iljin HySolus 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 Iljin HySolus 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 Iljin HySolus Co, you can compare the effects of market volatilities on Samsung Electronics and Iljin HySolus 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 Iljin HySolus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Iljin HySolus.
Diversification Opportunities for Samsung Electronics and Iljin HySolus
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Iljin is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Iljin HySolus Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin HySolus 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 Iljin HySolus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iljin HySolus has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Iljin HySolus go up and down completely randomly.
Pair Corralation between Samsung Electronics and Iljin HySolus
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.86 times more return on investment than Iljin HySolus. However, Samsung Electronics Co is 1.17 times less risky than Iljin HySolus. It trades about -0.07 of its potential returns per unit of risk. Iljin HySolus Co is currently generating about -0.19 per unit of risk. If you would invest 4,860,000 in Samsung Electronics Co on September 3, 2024 and sell it today you would lose (240,000) from holding Samsung Electronics Co or give up 4.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Iljin HySolus Co
Performance |
| Timeline |
| Samsung Electronics |
| Iljin HySolus |
Samsung Electronics and Iljin HySolus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Iljin HySolus
The main advantage of trading using opposite Samsung Electronics and Iljin HySolus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Iljin HySolus 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 Iljin HySolus will offset losses from the drop in Iljin HySolus' long position.| Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. UNISEM Co | Samsung Electronics vs. RPBio Inc | Samsung Electronics vs. Finebesteel |
| Iljin HySolus vs. Samsung Electronics Co | Iljin HySolus vs. Samsung Electronics Co | Iljin HySolus vs. LG Energy Solution | Iljin HySolus vs. SK Hynix |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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