Correlation Between Samsung Card and Hyundai
Can any of the company-specific risk be diversified away by investing in both Samsung Card and Hyundai 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 Samsung Card and Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Card Co and Hyundai Motor, you can compare the effects of market volatilities on Samsung Card and Hyundai 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 Samsung Card with a short position of Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Card and Hyundai.
Diversification Opportunities for Samsung Card and Hyundai
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and Hyundai is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Card Co and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor and Samsung Card 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 Samsung Card Co are associated (or correlated) with Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of Samsung Card i.e., Samsung Card and Hyundai go up and down completely randomly.
Pair Corralation between Samsung Card and Hyundai
Assuming the 90 days trading horizon Samsung Card Co is expected to under-perform the Hyundai. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Card Co is 1.43 times less risky than Hyundai. The stock trades about -0.01 of its potential returns per unit of risk. The Hyundai Motor is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 21,500,000 in Hyundai Motor on October 14, 2024 and sell it today you would earn a total of 1,100,000 from holding Hyundai Motor or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Card Co vs. Hyundai Motor
Performance |
| Timeline |
| Samsung Card |
| Hyundai Motor |
Samsung Card and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Card and Hyundai
The main advantage of trading using opposite Samsung Card and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Card position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| Samsung Card vs. Ilji Technology Co | Samsung Card vs. Seers Technology | Samsung Card vs. Lotte Non Life Insurance | Samsung Card vs. Innowireless Co |
| Hyundai vs. Daou Data Corp | Hyundai vs. System and Application | Hyundai vs. Samsung Life Insurance | Hyundai vs. DataSolution |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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