Correlation Between Samsung Publishing and Hyundai Engineering
Can any of the company-specific risk be diversified away by investing in both Samsung Publishing and Hyundai Engineering 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 Publishing and Hyundai Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Publishing Co and Hyundai Engineering Construction, you can compare the effects of market volatilities on Samsung Publishing and Hyundai Engineering 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 Publishing with a short position of Hyundai Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Publishing and Hyundai Engineering.
Diversification Opportunities for Samsung Publishing and Hyundai Engineering
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Hyundai is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Publishing Co and Hyundai Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Engineering and Samsung Publishing 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 Publishing Co are associated (or correlated) with Hyundai Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Engineering has no effect on the direction of Samsung Publishing i.e., Samsung Publishing and Hyundai Engineering go up and down completely randomly.
Pair Corralation between Samsung Publishing and Hyundai Engineering
Assuming the 90 days trading horizon Samsung Publishing Co is expected to under-perform the Hyundai Engineering. In addition to that, Samsung Publishing is 1.12 times more volatile than Hyundai Engineering Construction. It trades about -0.23 of its total potential returns per unit of risk. Hyundai Engineering Construction is currently generating about 0.06 per unit of volatility. If you would invest 2,620,000 in Hyundai Engineering Construction on October 14, 2024 and sell it today you would earn a total of 45,000 from holding Hyundai Engineering Construction or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Publishing Co vs. Hyundai Engineering Constructi
Performance |
| Timeline |
| Samsung Publishing |
| Hyundai Engineering |
Samsung Publishing and Hyundai Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Publishing and Hyundai Engineering
The main advantage of trading using opposite Samsung Publishing and Hyundai Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Publishing position performs unexpectedly, Hyundai Engineering 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 Engineering will offset losses from the drop in Hyundai Engineering's long position.| Samsung Publishing vs. Lotte Non Life Insurance | Samsung Publishing vs. Korea Alcohol Industrial | Samsung Publishing vs. Sam Yang Foods | Samsung Publishing vs. Sungmoon Electronics Co |
| Hyundai Engineering vs. LG Household Healthcare | Hyundai Engineering vs. Chorokbaem Healthcare Co | Hyundai Engineering vs. NH Investment Securities | Hyundai Engineering vs. Samsung Publishing Co |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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