Correlation Between Homecast CoLtd and Samsung Special
Can any of the company-specific risk be diversified away by investing in both Homecast CoLtd and Samsung Special 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 Homecast CoLtd and Samsung Special into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homecast CoLtd and Samsung Special Purpose, you can compare the effects of market volatilities on Homecast CoLtd and Samsung Special 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 Homecast CoLtd with a short position of Samsung Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homecast CoLtd and Samsung Special.
Diversification Opportunities for Homecast CoLtd and Samsung Special
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Homecast and Samsung is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Homecast CoLtd and Samsung Special Purpose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Special Purpose and Homecast CoLtd 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 Homecast CoLtd are associated (or correlated) with Samsung Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Special Purpose has no effect on the direction of Homecast CoLtd i.e., Homecast CoLtd and Samsung Special go up and down completely randomly.
Pair Corralation between Homecast CoLtd and Samsung Special
Assuming the 90 days trading horizon Homecast CoLtd is expected to under-perform the Samsung Special. But the stock apears to be less risky and, when comparing its historical volatility, Homecast CoLtd is 1.23 times less risky than Samsung Special. The stock trades about -0.04 of its potential returns per unit of risk. The Samsung Special Purpose is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 198,300 in Samsung Special Purpose on November 3, 2024 and sell it today you would lose (4,500) from holding Samsung Special Purpose or give up 2.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Homecast CoLtd vs. Samsung Special Purpose
Performance |
| Timeline |
| Homecast CoLtd |
| Samsung Special Purpose |
Homecast CoLtd and Samsung Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homecast CoLtd and Samsung Special
The main advantage of trading using opposite Homecast CoLtd and Samsung Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homecast CoLtd position performs unexpectedly, Samsung Special 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 Special will offset losses from the drop in Samsung Special's long position.| Homecast CoLtd vs. CG Hi Tech | Homecast CoLtd vs. Sempio Foods Co | Homecast CoLtd vs. Iljin Display | Homecast CoLtd vs. Inzi Display CoLtd |
| Samsung Special vs. DC Media CoLtd | Samsung Special vs. AeroSpace Technology of | Samsung Special vs. JYP Entertainment |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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