Correlation Between Samsung Publishing and Hyundai Heavy

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

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

Diversification Opportunities for Samsung Publishing and Hyundai Heavy

0.16

Correlation Coefficient

Samsung Publishing  Hyundai Heavy

Average diversification

The 3 months correlation between Samsung and Hyundai is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Publishing Co and Hyundai Heavy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Heavy Industries and Samsung Publishing 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 Publishing Co are associated (or correlated) with Hyundai Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Heavy Industries has no effect on the direction of Samsung Publishing i.e., Samsung Publishing and Hyundai Heavy go up and down completely randomly.

Pair Corralation between Samsung Publishing and Hyundai Heavy

Assuming the 90 days trading horizon Samsung Publishing Co is expected to generate 1.15 times more return on investment than Hyundai Heavy. However, Samsung Publishing is 1.15 times more volatile than Hyundai Heavy Industries. It trades about 0.12 of its potential returns per unit of risk. Hyundai Heavy Industries is currently generating about 0.13 per unit of risk. If you would invest  1,439,000  in Samsung Publishing Co on September 24, 2024 and sell it today you would earn a total of  119,000  from holding Samsung Publishing Co or generate 8.27% return on investment over 90 days.

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

Samsung Publishing Co  vs.  Hyundai Heavy Industries

Samsung Publishing

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Publishing Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung Publishing may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hyundai Heavy Industries

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hyundai Heavy Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hyundai Heavy sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung Publishing and Hyundai Heavy

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

The idea behind Samsung Publishing Co and Hyundai Heavy Industries 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.