Correlation Between Samsung Biologics and Hankook Furniture
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and Hankook Furniture 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 Biologics and Hankook Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Biologics Co and Hankook Furniture Co, you can compare the effects of market volatilities on Samsung Biologics and Hankook Furniture 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 Biologics with a short position of Hankook Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and Hankook Furniture.
Diversification Opportunities for Samsung Biologics and Hankook Furniture
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Hankook is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and Hankook Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Furniture and Samsung Biologics 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 Biologics Co are associated (or correlated) with Hankook Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankook Furniture has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and Hankook Furniture go up and down completely randomly.
Pair Corralation between Samsung Biologics and Hankook Furniture
Assuming the 90 days trading horizon Samsung Biologics Co is expected to generate 1.12 times more return on investment than Hankook Furniture. However, Samsung Biologics is 1.12 times more volatile than Hankook Furniture Co. It trades about 0.06 of its potential returns per unit of risk. Hankook Furniture Co is currently generating about 0.02 per unit of risk. If you would invest 78,900,000 in Samsung Biologics Co on August 25, 2024 and sell it today you would earn a total of 14,500,000 from holding Samsung Biologics Co or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Biologics Co vs. Hankook Furniture Co
Performance |
| Timeline |
| Samsung Biologics |
| Hankook Furniture |
Samsung Biologics and Hankook Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and Hankook Furniture
The main advantage of trading using opposite Samsung Biologics and Hankook Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, Hankook Furniture 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 Hankook Furniture will offset losses from the drop in Hankook Furniture's long position.| Samsung Biologics vs. Shinsegae Information Communication | Samsung Biologics vs. Digital Power Communications | Samsung Biologics vs. Korea Computer | Samsung Biologics vs. Lotte Data Communication |
| Hankook Furniture vs. Busan Industrial Co | Hankook Furniture vs. Busan Ind | Hankook Furniture vs. Mirae Asset Daewoo | Hankook Furniture vs. UNISEM 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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