Correlation Between Heungkuk Metaltech and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech 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 Heungkuk Metaltech and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heungkuk Metaltech CoLtd and Samsung Electronics Co, you can compare the effects of market volatilities on Heungkuk Metaltech 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 Heungkuk Metaltech with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and Samsung Electronics.
Diversification Opportunities for Heungkuk Metaltech and Samsung Electronics
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Heungkuk and Samsung is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Heungkuk Metaltech 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 Heungkuk Metaltech CoLtd 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 Heungkuk Metaltech i.e., Heungkuk Metaltech and Samsung Electronics go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and Samsung Electronics
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 0.82 times more return on investment than Samsung Electronics. However, Heungkuk Metaltech CoLtd is 1.21 times less risky than Samsung Electronics. It trades about -0.1 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.12 per unit of risk. If you would invest 532,000 in Heungkuk Metaltech CoLtd on November 4, 2024 and sell it today you would lose (13,000) from holding Heungkuk Metaltech CoLtd or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. Samsung Electronics Co
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| Samsung Electronics |
Heungkuk Metaltech and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and Samsung Electronics
The main advantage of trading using opposite Heungkuk Metaltech and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech 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.| Heungkuk Metaltech vs. Orbitech Co | Heungkuk Metaltech vs. ADTechnology CoLtd | Heungkuk Metaltech vs. PNC Technologies co | Heungkuk Metaltech vs. Asiana Airlines |
| Samsung Electronics vs. Cloud Air CoLtd | Samsung Electronics vs. Jeju Beer Co | Samsung Electronics vs. Air Busan Co | Samsung Electronics vs. Jeju Air 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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