Correlation Between HSBC Holdings and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings and Samsung Electronics 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 HSBC Holdings and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC Holdings plc and Samsung Electronics Co, you can compare the effects of market volatilities on HSBC Holdings and Samsung Electronics 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 HSBC Holdings with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Samsung Electronics.
Diversification Opportunities for HSBC Holdings and Samsung Electronics
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between HSBC and Samsung is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings plc and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and HSBC Holdings 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 HSBC Holdings plc are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of HSBC Holdings i.e., HSBC Holdings and Samsung Electronics go up and down completely randomly.
Pair Corralation between HSBC Holdings and Samsung Electronics
Assuming the 90 days trading horizon HSBC Holdings plc is expected to generate 0.76 times more return on investment than Samsung Electronics. However, HSBC Holdings plc is 1.32 times less risky than Samsung Electronics. It trades about 0.09 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.01 per unit of risk. If you would invest 57,654 in HSBC Holdings plc on September 4, 2024 and sell it today you would earn a total of 35,846 from holding HSBC Holdings plc or generate 62.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC Holdings plc vs. Samsung Electronics Co
Performance |
| Timeline |
| HSBC Holdings plc |
| Samsung Electronics |
HSBC Holdings and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and Samsung Electronics
The main advantage of trading using opposite HSBC Holdings and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings position performs unexpectedly, Samsung Electronics 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 Electronics will offset losses from the drop in Samsung Electronics' long position.| HSBC Holdings vs. United States Steel | HSBC Holdings vs. FIBRA Storage | HSBC Holdings vs. Micron Technology | HSBC Holdings vs. Delta Air Lines |
| Samsung Electronics vs. Apple Inc | Samsung Electronics vs. The Select Sector | Samsung Electronics vs. Promotora y Operadora | Samsung Electronics vs. SPDR Series Trust |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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