Correlation Between Samsung Life and Hanjin Transportation
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Hanjin Transportation 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 Hanjin Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life Insurance and Hanjin Transportation Co, you can compare the effects of market volatilities on Samsung Life and Hanjin Transportation 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 Hanjin Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Hanjin Transportation.
Diversification Opportunities for Samsung Life and Hanjin Transportation
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Hanjin is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life Insurance and Hanjin Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjin Transportation 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 Insurance are associated (or correlated) with Hanjin Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjin Transportation has no effect on the direction of Samsung Life i.e., Samsung Life and Hanjin Transportation go up and down completely randomly.
Pair Corralation between Samsung Life and Hanjin Transportation
Assuming the 90 days trading horizon Samsung Life Insurance is expected to generate 1.25 times more return on investment than Hanjin Transportation. However, Samsung Life is 1.25 times more volatile than Hanjin Transportation Co. It trades about 0.03 of its potential returns per unit of risk. Hanjin Transportation Co is currently generating about 0.0 per unit of risk. If you would invest 6,415,445 in Samsung Life Insurance on October 27, 2024 and sell it today you would earn a total of 1,704,555 from holding Samsung Life Insurance or generate 26.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life Insurance vs. Hanjin Transportation Co
Performance |
| Timeline |
| Samsung Life Insurance |
| Hanjin Transportation |
Samsung Life and Hanjin Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Hanjin Transportation
The main advantage of trading using opposite Samsung Life and Hanjin Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Hanjin Transportation 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 Hanjin Transportation will offset losses from the drop in Hanjin Transportation's long position.| Samsung Life vs. Nature and Environment | Samsung Life vs. Korea Steel Co | Samsung Life vs. People Technology | Samsung Life vs. Eagle Veterinary Technology |
| Hanjin Transportation vs. KB Financial Group | Hanjin Transportation vs. Shinhan Financial Group | Hanjin Transportation vs. Hana Financial | Hanjin Transportation vs. Woori Financial Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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