Correlation Between Hanyang ENG and Samil Enterprise

Can any of the company-specific risk be diversified away by investing in both Hanyang ENG and Samil Enterprise 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 Hanyang ENG and Samil Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Hanyang ENG and Samil Enterprise

-0.53

Correlation Coefficient

Hanyang ENG  Samil Enterprise

Excellent diversification

The 3 months correlation between Hanyang and Samil is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hanyang ENG Co and Samil Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samil Enterprise and Hanyang ENG 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 Hanyang ENG Co are associated (or correlated) with Samil Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samil Enterprise has no effect on the direction of Hanyang ENG i.e., Hanyang ENG and Samil Enterprise go up and down completely randomly.

Pair Corralation between Hanyang ENG and Samil Enterprise

Assuming the 90 days trading horizon Hanyang ENG is expected to generate 6.0 times less return on investment than Samil Enterprise. In addition to that, Hanyang ENG is 1.11 times more volatile than Samil Enterprise Co. It trades about 0.0 of its total potential returns per unit of risk. Samil Enterprise Co is currently generating about 0.01 per unit of volatility. If you would invest  343,551  in Samil Enterprise Co on September 12, 2024 and sell it today you would lose (2,051) from holding Samil Enterprise Co or give up 0.6% of portfolio value over 90 days.

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

Hanyang ENG Co  vs.  Samil Enterprise Co

Hanyang ENG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hanyang ENG Co 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Samil Enterprise

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Samil Enterprise Co are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samil Enterprise sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hanyang ENG and Samil Enterprise

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

The idea behind Hanyang ENG Co and Samil Enterprise 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.