Correlation Between Samsung SDI and Hanmi Semicon
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and Hanmi Semicon 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 SDI and Hanmi Semicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI and Hanmi Semicon, you can compare the effects of market volatilities on Samsung SDI and Hanmi Semicon 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 SDI with a short position of Hanmi Semicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and Hanmi Semicon.
Diversification Opportunities for Samsung SDI and Hanmi Semicon
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Hanmi is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI and Hanmi Semicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanmi Semicon and Samsung SDI 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 SDI are associated (or correlated) with Hanmi Semicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanmi Semicon has no effect on the direction of Samsung SDI i.e., Samsung SDI and Hanmi Semicon go up and down completely randomly.
Pair Corralation between Samsung SDI and Hanmi Semicon
Assuming the 90 days trading horizon Samsung SDI is expected to under-perform the Hanmi Semicon. In addition to that, Samsung SDI is 1.43 times more volatile than Hanmi Semicon. It trades about -0.31 of its total potential returns per unit of risk. Hanmi Semicon is currently generating about -0.38 per unit of volatility. If you would invest 9,280,000 in Hanmi Semicon on September 2, 2024 and sell it today you would lose (1,820,000) from holding Hanmi Semicon or give up 19.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung SDI vs. Hanmi Semicon
Performance |
| Timeline |
| Samsung SDI |
| Hanmi Semicon |
Samsung SDI and Hanmi Semicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and Hanmi Semicon
The main advantage of trading using opposite Samsung SDI and Hanmi Semicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, Hanmi Semicon 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 Hanmi Semicon will offset losses from the drop in Hanmi Semicon's long position.| Samsung SDI vs. Iljin Display | Samsung SDI vs. Aprogen Healthcare Games | Samsung SDI vs. Clean Science co | Samsung SDI vs. Nable Communications |
| Hanmi Semicon vs. Samsung Electronics Co | Hanmi Semicon vs. Samsung Electronics Co | Hanmi Semicon vs. LG Energy Solution | Hanmi Semicon 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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