Correlation Between Home Center and Samsung Card
Can any of the company-specific risk be diversified away by investing in both Home Center and Samsung Card 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 Home Center and Samsung Card into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Center Holdings and Samsung Card Co, you can compare the effects of market volatilities on Home Center and Samsung Card 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 Home Center with a short position of Samsung Card. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Center and Samsung Card.
Diversification Opportunities for Home Center and Samsung Card
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Home and Samsung is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Home Center Holdings and Samsung Card Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Card and Home Center 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 Home Center Holdings are associated (or correlated) with Samsung Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Card has no effect on the direction of Home Center i.e., Home Center and Samsung Card go up and down completely randomly.
Pair Corralation between Home Center and Samsung Card
Assuming the 90 days trading horizon Home Center Holdings is expected to under-perform the Samsung Card. In addition to that, Home Center is 1.39 times more volatile than Samsung Card Co. It trades about -0.1 of its total potential returns per unit of risk. Samsung Card Co is currently generating about 0.21 per unit of volatility. If you would invest 4,005,000 in Samsung Card Co on September 3, 2024 and sell it today you would earn a total of 265,000 from holding Samsung Card Co or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Center Holdings vs. Samsung Card Co
Performance |
| Timeline |
| Home Center Holdings |
| Samsung Card |
Home Center and Samsung Card Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Center and Samsung Card
The main advantage of trading using opposite Home Center and Samsung Card positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Center position performs unexpectedly, Samsung Card 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 Card will offset losses from the drop in Samsung Card's long position.| Home Center vs. Aprogen Healthcare Games | Home Center vs. Sejong Telecom | Home Center vs. Daishin Information Communications | Home Center vs. Hanjin Transportation Co |
| Samsung Card vs. CKH Food Health | Samsung Card vs. InnoTherapy | Samsung Card vs. INNOX Advanced Materials | Samsung Card vs. LG Household Healthcare |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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