Correlation Between Hana Financial and Samsung Biologics

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

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

Diversification Opportunities for Hana Financial and Samsung Biologics

0.55

Correlation Coefficient

Hana Financial  Samsung Biologics

Very weak diversification

The 3 months correlation between Hana and Samsung is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hana Financial and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics and Hana Financial 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 Hana Financial are associated (or correlated) with Samsung Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Biologics has no effect on the direction of Hana Financial i.e., Hana Financial and Samsung Biologics go up and down completely randomly.

Pair Corralation between Hana Financial and Samsung Biologics

Assuming the 90 days trading horizon Hana Financial is expected to generate 2.14 times more return on investment than Samsung Biologics. However, Hana Financial is 2.14 times more volatile than Samsung Biologics Co. It trades about 0.12 of its potential returns per unit of risk. Samsung Biologics Co is currently generating about 0.18 per unit of risk. If you would invest  5,720,368  in Hana Financial on December 24, 2024 and sell it today you would earn a total of  529,632  from holding Hana Financial or generate 9.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.28%
Values	Daily Returns

Hana Financial  vs.  Samsung Biologics Co

Hana Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hana Financial are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hana Financial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Samsung Biologics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Biologics Co are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung Biologics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hana Financial and Samsung Biologics

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

The idea behind Hana Financial and Samsung Biologics 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.