Correlation Between Samsung Electronics and Hapag Lloyd
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Hapag Lloyd 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 Hapag Lloyd 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 Hapag Lloyd AG, you can compare the effects of market volatilities on Samsung Electronics and Hapag Lloyd 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 Hapag Lloyd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Hapag Lloyd.
Diversification Opportunities for Samsung Electronics and Hapag Lloyd
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Hapag is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Hapag Lloyd AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hapag Lloyd AG 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 Hapag Lloyd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hapag Lloyd AG has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Hapag Lloyd go up and down completely randomly.
Pair Corralation between Samsung Electronics and Hapag Lloyd
Assuming the 90 days horizon Samsung Electronics Co is expected to under-perform the Hapag Lloyd. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Electronics Co is 1.16 times less risky than Hapag Lloyd. The stock trades about -0.07 of its potential returns per unit of risk. The Hapag Lloyd AG is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 15,950 in Hapag Lloyd AG on September 1, 2024 and sell it today you would lose (640.00) from holding Hapag Lloyd AG or give up 4.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung Electronics Co vs. Hapag Lloyd AG
Performance |
| Timeline |
| Samsung Electronics |
| Hapag Lloyd AG |
Samsung Electronics and Hapag Lloyd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Hapag Lloyd
The main advantage of trading using opposite Samsung Electronics and Hapag Lloyd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Hapag Lloyd 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 Hapag Lloyd will offset losses from the drop in Hapag Lloyd'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 |
| Hapag Lloyd vs. Qingdao Port International | Hapag Lloyd vs. Superior Plus Corp | Hapag Lloyd vs. NMI Holdings | Hapag Lloyd vs. Origin Agritech |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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