Correlation Between Hansol Chemical and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Hansol Chemical 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 Hansol Chemical and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansol Chemical Co and Samsung Electronics Co, you can compare the effects of market volatilities on Hansol Chemical 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 Hansol Chemical with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansol Chemical and Samsung Electronics.
Diversification Opportunities for Hansol Chemical and Samsung Electronics
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hansol and Samsung is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hansol Chemical 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 Hansol 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 Hansol Chemical 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 Hansol Chemical i.e., Hansol Chemical and Samsung Electronics go up and down completely randomly.
Pair Corralation between Hansol Chemical and Samsung Electronics
Assuming the 90 days trading horizon Hansol Chemical Co is expected to generate 1.96 times more return on investment than Samsung Electronics. However, Hansol Chemical is 1.96 times more volatile than Samsung Electronics Co. It trades about -0.04 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.22 per unit of risk. If you would invest 10,650,000 in Hansol Chemical Co on September 19, 2024 and sell it today you would lose (470,000) from holding Hansol Chemical Co or give up 4.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hansol Chemical Co vs. Samsung Electronics Co
Performance |
| Timeline |
| Hansol Chemical |
| Samsung Electronics |
Hansol Chemical and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansol Chemical and Samsung Electronics
The main advantage of trading using opposite Hansol Chemical and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansol Chemical 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.| Hansol Chemical vs. Samsung Electronics Co | Hansol Chemical vs. Samsung Electronics Co | Hansol Chemical vs. SK Hynix | Hansol Chemical vs. POSCO Holdings |
| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Solution Advanced Technology | Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. Busan Ind |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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