Correlation Between Hotel Shilla and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Hotel Shilla and Samsung Electronics 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 Hotel Shilla and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Shilla Co and Samsung Electronics Co, you can compare the effects of market volatilities on Hotel Shilla and Samsung Electronics 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 Hotel Shilla with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Shilla and Samsung Electronics.
Diversification Opportunities for Hotel Shilla and Samsung Electronics
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hotel and Samsung is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Shilla Co and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Hotel Shilla 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 Hotel Shilla Co are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Hotel Shilla i.e., Hotel Shilla and Samsung Electronics go up and down completely randomly.
Pair Corralation between Hotel Shilla and Samsung Electronics
Assuming the 90 days trading horizon Hotel Shilla is expected to generate 3.14 times less return on investment than Samsung Electronics. But when comparing it to its historical volatility, Hotel Shilla Co is 2.26 times less risky than Samsung Electronics. It trades about 0.07 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,520,000 in Samsung Electronics Co on October 11, 2024 and sell it today you would earn a total of 160,000 from holding Samsung Electronics Co or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Shilla Co vs. Samsung Electronics Co
Performance |
| Timeline |
| Hotel Shilla |
| Samsung Electronics |
Hotel Shilla and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Shilla and Samsung Electronics
The main advantage of trading using opposite Hotel Shilla and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Shilla position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Hotel Shilla vs. Inzi Display CoLtd | Hotel Shilla vs. Seoyon Topmetal Co | Hotel Shilla vs. Daejung Chemicals Metals | Hotel Shilla vs. LEENO Industrial |
| Samsung Electronics vs. Top Material Co | Samsung Electronics vs. SH Energy Chemical | Samsung Electronics vs. PI Advanced Materials | Samsung Electronics vs. Kukdo Chemical 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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