Correlation Between Samsung Card and Hanwha InvestmentSecuri

Can any of the company-specific risk be diversified away by investing in both Samsung Card and Hanwha InvestmentSecuri 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 Card and Hanwha InvestmentSecuri into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Samsung Card Co and Hanwha InvestmentSecurities Co, you can compare the effects of market volatilities on Samsung Card and Hanwha InvestmentSecuri 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 Card with a short position of Hanwha InvestmentSecuri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Card and Hanwha InvestmentSecuri.

Diversification Opportunities for Samsung Card and Hanwha InvestmentSecuri

-0.15

Correlation Coefficient

Samsung Card  Hanwha InvestmentSecuri

Good diversification

The 3 months correlation between Samsung and Hanwha is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Card Co and Hanwha InvestmentSecurities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha InvestmentSecuri and Samsung Card 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 Card Co are associated (or correlated) with Hanwha InvestmentSecuri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha InvestmentSecuri has no effect on the direction of Samsung Card i.e., Samsung Card and Hanwha InvestmentSecuri go up and down completely randomly.

Pair Corralation between Samsung Card and Hanwha InvestmentSecuri

Assuming the 90 days trading horizon Samsung Card Co is expected to generate 0.38 times more return on investment than Hanwha InvestmentSecuri. However, Samsung Card Co is 2.64 times less risky than Hanwha InvestmentSecuri. It trades about 0.07 of its potential returns per unit of risk. Hanwha InvestmentSecurities Co is currently generating about 0.0 per unit of risk. If you would invest  4,255,000  in Samsung Card Co on November 30, 2024 and sell it today you would earn a total of  240,000  from holding Samsung Card Co or generate 5.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Samsung Card Co  vs.  Hanwha InvestmentSecurities Co

Samsung Card

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Card Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung Card may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Hanwha InvestmentSecuri

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hanwha InvestmentSecurities Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Hanwha InvestmentSecuri is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Samsung Card and Hanwha InvestmentSecuri

The main advantage of trading using opposite Samsung Card and Hanwha InvestmentSecuri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Card position performs unexpectedly, Hanwha InvestmentSecuri 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 Hanwha InvestmentSecuri will offset losses from the drop in Hanwha InvestmentSecuri's long position.

The idea behind Samsung Card Co and Hanwha InvestmentSecurities Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.