Correlation Between Samsung Biologics and Hyundai
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and Hyundai 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 Hyundai 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 Hyundai Motor Co, you can compare the effects of market volatilities on Samsung Biologics and Hyundai 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 Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and Hyundai.
Diversification Opportunities for Samsung Biologics and Hyundai
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and Hyundai is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and Hyundai go up and down completely randomly.
Pair Corralation between Samsung Biologics and Hyundai
Assuming the 90 days trading horizon Samsung Biologics Co is expected to under-perform the Hyundai. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Biologics Co is 1.07 times less risky than Hyundai. The stock trades about -0.26 of its potential returns per unit of risk. The Hyundai Motor Co is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 16,480,000 in Hyundai Motor Co on August 25, 2024 and sell it today you would lose (790,000) from holding Hyundai Motor Co or give up 4.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Biologics Co vs. Hyundai Motor Co
Performance |
| Timeline |
| Samsung Biologics |
| Hyundai Motor |
Samsung Biologics and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and Hyundai
The main advantage of trading using opposite Samsung Biologics and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, Hyundai 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 will offset losses from the drop in Hyundai's long position.| Samsung Biologics vs. InfoBank | Samsung Biologics vs. DataSolution | Samsung Biologics vs. Koryo Credit Information | Samsung Biologics vs. Settlebank |
| Hyundai vs. Hyundai Motor Co | Hyundai vs. Busan Industrial Co | Hyundai vs. Busan Ind | Hyundai vs. Mirae Asset Daewoo |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |