Correlation Between Hurum and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both Hurum and Samsung SDI 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 Hurum and Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurum Co and Samsung SDI, you can compare the effects of market volatilities on Hurum and Samsung SDI 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 Hurum with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurum and Samsung SDI.
Diversification Opportunities for Hurum and Samsung SDI
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hurum and Samsung is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hurum Co and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI and Hurum 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 Hurum Co are associated (or correlated) with Samsung SDI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung SDI has no effect on the direction of Hurum i.e., Hurum and Samsung SDI go up and down completely randomly.
Pair Corralation between Hurum and Samsung SDI
Assuming the 90 days trading horizon Hurum Co is expected to under-perform the Samsung SDI. But the stock apears to be less risky and, when comparing its historical volatility, Hurum Co is 3.21 times less risky than Samsung SDI. The stock trades about -0.05 of its potential returns per unit of risk. The Samsung SDI is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 22,200,000 in Samsung SDI on November 29, 2024 and sell it today you would earn a total of 1,550,000 from holding Samsung SDI or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurum Co vs. Samsung SDI
Performance |
| Timeline |
| Hurum |
| Samsung SDI |
Hurum and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurum and Samsung SDI
The main advantage of trading using opposite Hurum and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurum position performs unexpectedly, Samsung SDI 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 SDI will offset losses from the drop in Samsung SDI's long position.| Hurum vs. Samhyun Steel Co | Hurum vs. Kukil Metal Co | Hurum vs. Haesung Industrial Co | Hurum vs. Hyundai Industrial Co |
| Samsung SDI vs. Playgram Co | Samsung SDI vs. Nice Information Telecommunication | Samsung SDI vs. LG Display Co | Samsung SDI vs. Daishin Information Communications |
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.
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