Correlation Between Hanjoo Light and Samick Musical
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light and Samick Musical 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 Hanjoo Light and Samick Musical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjoo Light Metal and Samick Musical Instruments, you can compare the effects of market volatilities on Hanjoo Light and Samick Musical 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 Hanjoo Light with a short position of Samick Musical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and Samick Musical.
Diversification Opportunities for Hanjoo Light and Samick Musical
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hanjoo and Samick is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal and Samick Musical Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samick Musical Instr and Hanjoo Light 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 Hanjoo Light Metal are associated (or correlated) with Samick Musical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samick Musical Instr has no effect on the direction of Hanjoo Light i.e., Hanjoo Light and Samick Musical go up and down completely randomly.
Pair Corralation between Hanjoo Light and Samick Musical
Assuming the 90 days trading horizon Hanjoo Light is expected to generate 4.91 times less return on investment than Samick Musical. But when comparing it to its historical volatility, Hanjoo Light Metal is 4.57 times less risky than Samick Musical. It trades about 0.18 of its potential returns per unit of risk. Samick Musical Instruments is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 116,900 in Samick Musical Instruments on November 3, 2024 and sell it today you would earn a total of 21,800 from holding Samick Musical Instruments or generate 18.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjoo Light Metal vs. Samick Musical Instruments
Performance |
| Timeline |
| Hanjoo Light Metal |
| Samick Musical Instr |
Hanjoo Light and Samick Musical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and Samick Musical
The main advantage of trading using opposite Hanjoo Light and Samick Musical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light position performs unexpectedly, Samick Musical 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 Samick Musical will offset losses from the drop in Samick Musical's long position.| Hanjoo Light vs. Lake Materials Co | Hanjoo Light vs. DSC Investment | Hanjoo Light vs. Korea Investment Holdings | Hanjoo Light vs. EBEST Investment Securities |
| Samick Musical vs. Lotte Non Life Insurance | Samick Musical vs. Dongbu Insurance Co | Samick Musical vs. Incar Financial Service | Samick Musical vs. Jeju Bank |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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