Correlation Between Hannong Chemicals and Samsung Biologics
Can any of the company-specific risk be diversified away by investing in both Hannong Chemicals and Samsung Biologics 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 Hannong Chemicals and Samsung Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannong Chemicals and Samsung Biologics Co, you can compare the effects of market volatilities on Hannong Chemicals and Samsung Biologics 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 Hannong Chemicals with a short position of Samsung Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannong Chemicals and Samsung Biologics.
Diversification Opportunities for Hannong Chemicals and Samsung Biologics
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hannong and Samsung is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hannong Chemicals and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics and Hannong Chemicals 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 Hannong Chemicals are associated (or correlated) with Samsung Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Biologics has no effect on the direction of Hannong Chemicals i.e., Hannong Chemicals and Samsung Biologics go up and down completely randomly.
Pair Corralation between Hannong Chemicals and Samsung Biologics
Assuming the 90 days trading horizon Hannong Chemicals is expected to generate 3.05 times more return on investment than Samsung Biologics. However, Hannong Chemicals is 3.05 times more volatile than Samsung Biologics Co. It trades about 0.02 of its potential returns per unit of risk. Samsung Biologics Co is currently generating about 0.04 per unit of risk. If you would invest 2,202,630 in Hannong Chemicals on November 27, 2024 and sell it today you would lose (308,630) from holding Hannong Chemicals or give up 14.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Hannong Chemicals vs. Samsung Biologics Co
Performance |
| Timeline |
| Hannong Chemicals |
| Samsung Biologics |
Hannong Chemicals and Samsung Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannong Chemicals and Samsung Biologics
The main advantage of trading using opposite Hannong Chemicals and Samsung Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannong Chemicals position performs unexpectedly, Samsung Biologics 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 Biologics will offset losses from the drop in Samsung Biologics' long position.| Hannong Chemicals vs. GS Retail Co | Hannong Chemicals vs. Cloud Air CoLtd | Hannong Chemicals vs. MediaZen | Hannong Chemicals vs. Nasmedia Co |
| Samsung Biologics vs. Korea Air Svc | Samsung Biologics vs. KPX Green Chemical | Samsung Biologics vs. Chorokbaem Healthcare Co | Samsung Biologics vs. Infinitt Healthcare 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |