Correlation Between Hanil Chemical and Samick Musical
Can any of the company-specific risk be diversified away by investing in both Hanil Chemical and Samick Musical 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 Hanil Chemical and Samick Musical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanil Chemical Ind and Samick Musical Instruments, you can compare the effects of market volatilities on Hanil Chemical and Samick Musical 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 Hanil Chemical with a short position of Samick Musical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanil Chemical and Samick Musical.
Diversification Opportunities for Hanil Chemical and Samick Musical
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hanil and Samick is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hanil Chemical Ind and Samick Musical Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samick Musical Instr and Hanil Chemical 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 Hanil Chemical Ind are associated (or correlated) with Samick Musical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samick Musical Instr has no effect on the direction of Hanil Chemical i.e., Hanil Chemical and Samick Musical go up and down completely randomly.
Pair Corralation between Hanil Chemical and Samick Musical
Assuming the 90 days trading horizon Hanil Chemical is expected to generate 5.59 times less return on investment than Samick Musical. But when comparing it to its historical volatility, Hanil Chemical Ind is 1.63 times less risky than Samick Musical. It trades about 0.07 of its potential returns per unit of risk. Samick Musical Instruments is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 105,926 in Samick Musical Instruments on October 30, 2024 and sell it today you would earn a total of 44,174 from holding Samick Musical Instruments or generate 41.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanil Chemical Ind vs. Samick Musical Instruments
Performance |
| Timeline |
| Hanil Chemical Ind |
| Samick Musical Instr |
Hanil Chemical and Samick Musical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanil Chemical and Samick Musical
The main advantage of trading using opposite Hanil Chemical and Samick Musical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanil Chemical position performs unexpectedly, Samick Musical 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 Samick Musical will offset losses from the drop in Samick Musical's long position.| Hanil Chemical vs. Hanjin Transportation Co | Hanil Chemical vs. TS Investment Corp | Hanil Chemical vs. Dongbang Transport Logistics | Hanil Chemical vs. Innowireless Co |
| Samick Musical vs. Digital Power Communications | Samick Musical vs. SH Energy Chemical | Samick Musical vs. Isu Chemical Co | Samick Musical vs. Seoul Electronics Telecom |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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