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 Insurance, 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

-0.3

Correlation Coefficient

Hyosung Advanced  Samsung Life

Very good diversification

The 3 months correlation between Hyosung and Samsung is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hyosung Advanced Materials and Samsung Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Life Insurance 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 Insurance 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 1.0 times more return on investment than Samsung Life. However, Hyosung Advanced is 1.0 times more volatile than Samsung Life Insurance. It trades about 0.06 of its potential returns per unit of risk. Samsung Life Insurance is currently generating about -0.07 per unit of risk. If you would invest  17,381,700  in Hyosung Advanced Materials on December 4, 2024 and sell it today you would earn a total of  1,328,300  from holding Hyosung Advanced Materials or generate 7.64% 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 Insurance

Hyosung Advanced Mat

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hyosung Advanced Materials are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hyosung Advanced may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Samsung Life Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Samsung Life Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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.

The idea behind Hyosung Advanced Materials and Samsung Life Insurance 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.