Correlation Between Samsung Electronics and Hartford Financial
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Hartford Financial 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 Hartford Financial 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 The Hartford Financial, you can compare the effects of market volatilities on Samsung Electronics and Hartford Financial 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 Hartford Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Hartford Financial.
Diversification Opportunities for Samsung Electronics and Hartford Financial
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Hartford is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and The Hartford Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Financial 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 Hartford Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Financial has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Hartford Financial go up and down completely randomly.
Pair Corralation between Samsung Electronics and Hartford Financial
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the Hartford Financial. In addition to that, Samsung Electronics is 1.68 times more volatile than The Hartford Financial. It trades about -0.07 of its total potential returns per unit of risk. The Hartford Financial is currently generating about 0.36 per unit of volatility. If you would invest 10,200 in The Hartford Financial on September 1, 2024 and sell it today you would earn a total of 1,500 from holding The Hartford Financial or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. The Hartford Financial
Performance |
| Timeline |
| Samsung Electronics |
| The Hartford Financial |
Samsung Electronics and Hartford Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Hartford Financial
The main advantage of trading using opposite Samsung Electronics and Hartford Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Hartford Financial 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 Hartford Financial will offset losses from the drop in Hartford Financial's long position.| Samsung Electronics vs. QINGCI GAMES INC | Samsung Electronics vs. GAMESTOP | Samsung Electronics vs. CI GAMES SA | Samsung Electronics vs. Tencent Music Entertainment |
| Hartford Financial vs. SCIENCE IN SPORT | Hartford Financial vs. Cleanaway Waste Management | Hartford Financial vs. TITANIUM TRANSPORTGROUP | Hartford Financial vs. International Consolidated Airlines |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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