Correlation Between Hana Financial and Samsung Fire
Can any of the company-specific risk be diversified away by investing in both Hana Financial and Samsung Fire 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 Hana Financial and Samsung Fire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Financial and Samsung Fire Marine, you can compare the effects of market volatilities on Hana Financial and Samsung Fire 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 Hana Financial with a short position of Samsung Fire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Financial and Samsung Fire.
Diversification Opportunities for Hana Financial and Samsung Fire
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hana and Samsung is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Samsung Fire Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Fire Marine and Hana Financial 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 Hana Financial are associated (or correlated) with Samsung Fire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Fire Marine has no effect on the direction of Hana Financial i.e., Hana Financial and Samsung Fire go up and down completely randomly.
Pair Corralation between Hana Financial and Samsung Fire
Assuming the 90 days trading horizon Hana Financial is expected to generate 0.58 times more return on investment than Samsung Fire. However, Hana Financial is 1.74 times less risky than Samsung Fire. It trades about -0.02 of its potential returns per unit of risk. Samsung Fire Marine is currently generating about -0.23 per unit of risk. If you would invest 5,890,000 in Hana Financial on October 25, 2024 and sell it today you would lose (20,000) from holding Hana Financial or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Financial vs. Samsung Fire Marine
Performance |
| Timeline |
| Hana Financial |
| Samsung Fire Marine |
Hana Financial and Samsung Fire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Financial and Samsung Fire
The main advantage of trading using opposite Hana Financial and Samsung Fire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Financial position performs unexpectedly, Samsung Fire 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 Fire will offset losses from the drop in Samsung Fire's long position.| Hana Financial vs. Samsung Electronics Co | Hana Financial vs. Samsung Electronics Co | Hana Financial vs. SK Hynix | Hana Financial vs. HMM Co |
| Samsung Fire vs. Daou Data Corp | Samsung Fire vs. Jeong Moon Information | Samsung Fire vs. Jeju Beer Co | Samsung Fire vs. Nice Information Telecommunication |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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