Correlation Between Samsung Life and Hanil Chemical
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Hanil Chemical 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 Life and Hanil Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and Hanil Chemical Ind, you can compare the effects of market volatilities on Samsung Life and Hanil Chemical 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 Life with a short position of Hanil Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Hanil Chemical.
Diversification Opportunities for Samsung Life and Hanil Chemical
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Hanil is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and Hanil Chemical Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanil Chemical Ind and Samsung Life 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 Life are associated (or correlated) with Hanil Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanil Chemical Ind has no effect on the direction of Samsung Life i.e., Samsung Life and Hanil Chemical go up and down completely randomly.
Pair Corralation between Samsung Life and Hanil Chemical
Assuming the 90 days trading horizon Samsung Life is expected to under-perform the Hanil Chemical. In addition to that, Samsung Life is 1.31 times more volatile than Hanil Chemical Ind. It trades about -0.04 of its total potential returns per unit of risk. Hanil Chemical Ind is currently generating about 0.07 per unit of volatility. If you would invest 1,115,000 in Hanil Chemical Ind on November 3, 2024 and sell it today you would earn a total of 28,000 from holding Hanil Chemical Ind or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life vs. Hanil Chemical Ind
Performance |
| Timeline |
| Samsung Life |
| Hanil Chemical Ind |
Samsung Life and Hanil Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Hanil Chemical
The main advantage of trading using opposite Samsung Life and Hanil Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Hanil Chemical 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 Hanil Chemical will offset losses from the drop in Hanil Chemical's long position.| Samsung Life vs. Hanwha Life Insurance | Samsung Life vs. Dongbu Insurance Co | Samsung Life vs. Iljin Display | Samsung Life vs. LG Display Co |
| Hanil Chemical vs. Insun Environment New | Hanil Chemical vs. KB Financial Group | Hanil Chemical vs. Samsung Life Insurance | Hanil Chemical vs. Nature and Environment |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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