Correlation Between Samsung Life and Hyundai Industrial
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Hyundai Industrial 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 Hyundai Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and Hyundai Industrial Co, you can compare the effects of market volatilities on Samsung Life and Hyundai Industrial 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 Hyundai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Hyundai Industrial.
Diversification Opportunities for Samsung Life and Hyundai Industrial
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Hyundai is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and Hyundai Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Industrial 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 Hyundai Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Industrial has no effect on the direction of Samsung Life i.e., Samsung Life and Hyundai Industrial go up and down completely randomly.
Pair Corralation between Samsung Life and Hyundai Industrial
Assuming the 90 days trading horizon Samsung Life is expected to under-perform the Hyundai Industrial. In addition to that, Samsung Life is 1.49 times more volatile than Hyundai Industrial Co. It trades about -0.48 of its total potential returns per unit of risk. Hyundai Industrial Co is currently generating about 0.17 per unit of volatility. If you would invest 491,500 in Hyundai Industrial Co on October 29, 2024 and sell it today you would earn a total of 17,500 from holding Hyundai Industrial Co or generate 3.56% 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. Hyundai Industrial Co
Performance |
| Timeline |
| Samsung Life |
| Hyundai Industrial |
Samsung Life and Hyundai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Hyundai Industrial
The main advantage of trading using opposite Samsung Life and Hyundai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Hyundai Industrial 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 Industrial will offset losses from the drop in Hyundai Industrial's long position.| Samsung Life vs. Pan Entertainment Co | Samsung Life vs. E Investment Development | Samsung Life vs. Korea Alcohol Industrial | Samsung Life vs. Nasmedia Co |
| Hyundai Industrial vs. DONGKUK STEEL MILL | Hyundai Industrial vs. Insun Environment New | Hyundai Industrial vs. BooKook Steel Co | Hyundai Industrial vs. Wonil Special Steel |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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