Correlation Between Hyundai Home and Samsung Life
Can any of the company-specific risk be diversified away by investing in both Hyundai Home and Samsung Life 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 Hyundai Home and Samsung Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Home Shopping and Samsung Life, you can compare the effects of market volatilities on Hyundai Home and Samsung Life 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 Hyundai Home with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai Home and Samsung Life.
Diversification Opportunities for Hyundai Home and Samsung Life
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyundai and Samsung is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Home Shopping and Samsung Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life and Hyundai Home 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 Hyundai Home Shopping are associated (or correlated) with Samsung Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Life has no effect on the direction of Hyundai Home i.e., Hyundai Home and Samsung Life go up and down completely randomly.
Pair Corralation between Hyundai Home and Samsung Life
Assuming the 90 days trading horizon Hyundai Home Shopping is expected to under-perform the Samsung Life. But the stock apears to be less risky and, when comparing its historical volatility, Hyundai Home Shopping is 1.25 times less risky than Samsung Life. The stock trades about -0.01 of its potential returns per unit of risk. The Samsung Life is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,159,612 in Samsung Life on September 12, 2024 and sell it today you would earn a total of 2,890,388 from holding Samsung Life or generate 40.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai Home Shopping vs. Samsung Life
Performance |
| Timeline |
| Hyundai Home Shopping |
| Samsung Life |
Hyundai Home and Samsung Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai Home and Samsung Life
The main advantage of trading using opposite Hyundai Home and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai Home position performs unexpectedly, Samsung Life 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 Samsung Life will offset losses from the drop in Samsung Life's long position.| Hyundai Home vs. Samsung Electronics Co | Hyundai Home vs. Samsung Electronics Co | Hyundai Home vs. SK Hynix | Hyundai Home vs. POSCO Holdings |
| Samsung Life vs. Innowireless Co | Samsung Life vs. Polaris Office Corp | Samsung Life vs. Hyundai Home Shopping | Samsung Life vs. Echomarketing CoLtd |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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