Correlation Between Hana Materials and Samsung CT

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

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

Diversification Opportunities for Hana Materials and Samsung CT

0.73

Correlation Coefficient

Hana Materials  Samsung CT

Poor diversification

The 3 months correlation between Hana and Samsung is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and Samsung CT Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung CT Corp and Hana Materials 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 Materials are associated (or correlated) with Samsung CT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung CT Corp has no effect on the direction of Hana Materials i.e., Hana Materials and Samsung CT go up and down completely randomly.

Pair Corralation between Hana Materials and Samsung CT

Assuming the 90 days trading horizon Hana Materials is expected to generate 2.71 times more return on investment than Samsung CT. However, Hana Materials is 2.71 times more volatile than Samsung CT Corp. It trades about 0.16 of its potential returns per unit of risk. Samsung CT Corp is currently generating about 0.08 per unit of risk. If you would invest  2,325,000  in Hana Materials on December 26, 2024 and sell it today you would earn a total of  1,075,000  from holding Hana Materials or generate 46.24% return on investment over 90 days.

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

Hana Materials  vs.  Samsung CT Corp

Hana Materials

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hana Materials are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hana Materials sustained solid returns over the last few months and may actually be approaching a breakup point.

Samsung CT Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung CT Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samsung CT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Hana Materials and Samsung CT

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

The idea behind Hana Materials and Samsung CT Corp 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.