Correlation Between Samsung Life and HLB Power
Can any of the company-specific risk be diversified away by investing in both Samsung Life and HLB Power 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 HLB Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and HLB Power Co, you can compare the effects of market volatilities on Samsung Life and HLB Power 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 HLB Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and HLB Power.
Diversification Opportunities for Samsung Life and HLB Power
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and HLB is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and HLB Power Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HLB Power 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 HLB Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HLB Power has no effect on the direction of Samsung Life i.e., Samsung Life and HLB Power go up and down completely randomly.
Pair Corralation between Samsung Life and HLB Power
Assuming the 90 days trading horizon Samsung Life is expected to generate 0.49 times more return on investment than HLB Power. However, Samsung Life is 2.05 times less risky than HLB Power. It trades about -0.02 of its potential returns per unit of risk. HLB Power Co is currently generating about -0.41 per unit of risk. If you would invest 8,910,000 in Samsung Life on December 1, 2024 and sell it today you would lose (230,000) from holding Samsung Life or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Samsung Life vs. HLB Power Co
Performance |
| Timeline |
| Samsung Life |
| HLB Power |
Samsung Life and HLB Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and HLB Power
The main advantage of trading using opposite Samsung Life and HLB Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, HLB Power 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 HLB Power will offset losses from the drop in HLB Power's long position.| Samsung Life vs. Keyang Electric Machinery | Samsung Life vs. Dongbang Ship Machinery | Samsung Life vs. Kaonmedia Co | Samsung Life vs. Seohee Construction Co |
| HLB Power vs. Shinhan Inverse Copper | HLB Power vs. Daiyang Metal Co | HLB Power vs. CU Tech Corp | HLB Power vs. SS TECH |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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