Correlation Between Hanwha Aerospace and Sam Yang
Can any of the company-specific risk be diversified away by investing in both Hanwha Aerospace and Sam Yang 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 Hanwha Aerospace and Sam Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha Aerospace Co and Sam Yang Foods, you can compare the effects of market volatilities on Hanwha Aerospace and Sam Yang 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 Hanwha Aerospace with a short position of Sam Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Aerospace and Sam Yang.
Diversification Opportunities for Hanwha Aerospace and Sam Yang
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanwha and Sam is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Aerospace Co and Sam Yang Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Yang Foods and Hanwha Aerospace 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 Hanwha Aerospace Co are associated (or correlated) with Sam Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Yang Foods has no effect on the direction of Hanwha Aerospace i.e., Hanwha Aerospace and Sam Yang go up and down completely randomly.
Pair Corralation between Hanwha Aerospace and Sam Yang
Assuming the 90 days trading horizon Hanwha Aerospace Co is expected to under-perform the Sam Yang. In addition to that, Hanwha Aerospace is 1.7 times more volatile than Sam Yang Foods. It trades about -0.13 of its total potential returns per unit of risk. Sam Yang Foods is currently generating about -0.11 per unit of volatility. If you would invest 58,900,000 in Sam Yang Foods on September 4, 2024 and sell it today you would lose (3,700,000) from holding Sam Yang Foods or give up 6.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Aerospace Co vs. Sam Yang Foods
Performance |
| Timeline |
| Hanwha Aerospace |
| Sam Yang Foods |
Hanwha Aerospace and Sam Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Aerospace and Sam Yang
The main advantage of trading using opposite Hanwha Aerospace and Sam Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Aerospace position performs unexpectedly, Sam Yang 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 Sam Yang will offset losses from the drop in Sam Yang's long position.| Hanwha Aerospace vs. Sam Yang Foods | Hanwha Aerospace vs. Green Cross Medical | Hanwha Aerospace vs. Shinsegae Food | Hanwha Aerospace vs. ITM Semiconductor Co |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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