Correlation Between HuMC and Samsung KODEX
Can any of the company-specific risk be diversified away by investing in both HuMC and Samsung KODEX 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 HuMC and Samsung KODEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HuMC Co and Samsung KODEX IT, you can compare the effects of market volatilities on HuMC and Samsung KODEX 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 HuMC with a short position of Samsung KODEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of HuMC and Samsung KODEX.
Diversification Opportunities for HuMC and Samsung KODEX
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HuMC and Samsung is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding HuMC Co and Samsung KODEX IT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung KODEX IT and HuMC 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 HuMC Co are associated (or correlated) with Samsung KODEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung KODEX IT has no effect on the direction of HuMC i.e., HuMC and Samsung KODEX go up and down completely randomly.
Pair Corralation between HuMC and Samsung KODEX
Assuming the 90 days trading horizon HuMC Co is expected to generate 1.0 times more return on investment than Samsung KODEX. However, HuMC Co is 1.0 times less risky than Samsung KODEX. It trades about -0.02 of its potential returns per unit of risk. Samsung KODEX IT is currently generating about -0.1 per unit of risk. If you would invest 99,600 in HuMC Co on September 25, 2024 and sell it today you would lose (900.00) from holding HuMC Co or give up 0.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
HuMC Co vs. Samsung KODEX IT
Performance |
| Timeline |
| HuMC |
| Samsung KODEX IT |
HuMC and Samsung KODEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HuMC and Samsung KODEX
The main advantage of trading using opposite HuMC and Samsung KODEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HuMC position performs unexpectedly, Samsung KODEX 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 KODEX will offset losses from the drop in Samsung KODEX's long position.| HuMC vs. Samsung Electronics Co | HuMC vs. Samsung Electronics Co | HuMC vs. LG Energy Solution | HuMC vs. SK Hynix |
| Samsung KODEX vs. 456680 | Samsung KODEX vs. Busan Industrial Co | Samsung KODEX vs. Busan Ind | Samsung KODEX 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |