Correlation Between Hyosung Advanced and Samsung Life
Can any of the company-specific risk be diversified away by investing in both Hyosung Advanced and Samsung Life 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 Hyosung Advanced and Samsung Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyosung Advanced Materials and Samsung Life, you can compare the effects of market volatilities on Hyosung Advanced and Samsung Life 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 Hyosung Advanced with a short position of Samsung Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyosung Advanced and Samsung Life.
Diversification Opportunities for Hyosung Advanced and Samsung Life
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyosung and Samsung is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Advanced Materials and Samsung Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life and Hyosung Advanced 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 Hyosung Advanced Materials are associated (or correlated) with Samsung Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Life has no effect on the direction of Hyosung Advanced i.e., Hyosung Advanced and Samsung Life go up and down completely randomly.
Pair Corralation between Hyosung Advanced and Samsung Life
Assuming the 90 days trading horizon Hyosung Advanced Materials is expected to generate 1.18 times more return on investment than Samsung Life. However, Hyosung Advanced is 1.18 times more volatile than Samsung Life. It trades about 0.19 of its potential returns per unit of risk. Samsung Life is currently generating about -0.11 per unit of risk. If you would invest 16,650,000 in Hyosung Advanced Materials on October 8, 2024 and sell it today you would earn a total of 1,550,000 from holding Hyosung Advanced Materials or generate 9.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Hyosung Advanced Materials vs. Samsung Life
Performance |
Timeline |
Hyosung Advanced Mat |
Samsung Life |
Hyosung Advanced and Samsung Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hyosung Advanced and Samsung Life
The main advantage of trading using opposite Hyosung Advanced and Samsung Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyosung Advanced position performs unexpectedly, Samsung Life 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 Life will offset losses from the drop in Samsung Life's long position.Hyosung Advanced vs. Busan Industrial Co | Hyosung Advanced vs. Busan Ind | Hyosung Advanced vs. UNISEM Co | Hyosung Advanced vs. RPBio Inc |
Samsung Life vs. KT Submarine Telecom | Samsung Life vs. Korea Information Communications | Samsung Life vs. Shinhan Financial Group | Samsung Life vs. Playgram Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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