Correlation Between Hyundai Mobis and Samsung Publishing

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

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

Diversification Opportunities for Hyundai Mobis and Samsung Publishing

-0.35

Correlation Coefficient

Hyundai Mobis  Samsung Publishing

Very good diversification

The 3 months correlation between Hyundai and Samsung is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Mobis and Samsung Publishing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Publishing and Hyundai Mobis 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 Hyundai Mobis are associated (or correlated) with Samsung Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Publishing has no effect on the direction of Hyundai Mobis i.e., Hyundai Mobis and Samsung Publishing go up and down completely randomly.

Pair Corralation between Hyundai Mobis and Samsung Publishing

Assuming the 90 days trading horizon Hyundai Mobis is expected to generate 0.51 times more return on investment than Samsung Publishing. However, Hyundai Mobis is 1.94 times less risky than Samsung Publishing. It trades about 0.08 of its potential returns per unit of risk. Samsung Publishing Co is currently generating about 0.04 per unit of risk. If you would invest  22,350,000  in Hyundai Mobis on September 23, 2024 and sell it today you would earn a total of  2,050,000  from holding Hyundai Mobis or generate 9.17% return on investment over 90 days.

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

Hyundai Mobis  vs.  Samsung Publishing Co

Hyundai Mobis

Risk-Adjusted Performance

6 of 100

Modest

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

Samsung Publishing

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Publishing Co are ranked lower than 3 (%) 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.

Pair Trading with Hyundai Mobis and Samsung Publishing

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

The idea behind Hyundai Mobis and Samsung Publishing 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.