Correlation Between Samsung Electronics and Hecla Mining
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Hecla Mining 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 Electronics and Hecla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Hecla Mining Co, you can compare the effects of market volatilities on Samsung Electronics and Hecla Mining 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 Electronics with a short position of Hecla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Hecla Mining.
Diversification Opportunities for Samsung Electronics and Hecla Mining
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Hecla is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Hecla Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hecla Mining and Samsung Electronics 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 Electronics Co are associated (or correlated) with Hecla Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hecla Mining has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Hecla Mining go up and down completely randomly.
Pair Corralation between Samsung Electronics and Hecla Mining
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Hecla Mining. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.25 times less risky than Hecla Mining. The stock trades about -0.1 of its potential returns per unit of risk. The Hecla Mining Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 541.00 in Hecla Mining Co on October 14, 2024 and sell it today you would lose (6.00) from holding Hecla Mining Co or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Hecla Mining Co
Performance |
| Timeline |
| Samsung Electronics |
| Hecla Mining |
Samsung Electronics and Hecla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Hecla Mining
The main advantage of trading using opposite Samsung Electronics and Hecla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Hecla Mining 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 Hecla Mining will offset losses from the drop in Hecla Mining's long position.| Samsung Electronics vs. Beowulf Mining | Samsung Electronics vs. Hollywood Bowl Group | Samsung Electronics vs. XLMedia PLC | Samsung Electronics vs. Eastinco Mining Exploration |
| Hecla Mining vs. Arrow Electronics | Hecla Mining vs. Medical Properties Trust | Hecla Mining vs. Samsung Electronics Co | Hecla Mining vs. Take Two Interactive Software |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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