Correlation Between Hyundai Green and Samsung Electronics

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

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

Diversification Opportunities for Hyundai Green and Samsung Electronics

-0.33

Correlation Coefficient

Hyundai Green  Samsung Electronics

Very good diversification

The 3 months correlation between Hyundai and Samsung is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Green Food and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Hyundai Green 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 Green Food are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Hyundai Green i.e., Hyundai Green and Samsung Electronics go up and down completely randomly.

Pair Corralation between Hyundai Green and Samsung Electronics

Assuming the 90 days trading horizon Hyundai Green Food is expected to generate 0.57 times more return on investment than Samsung Electronics. However, Hyundai Green Food is 1.76 times less risky than Samsung Electronics. It trades about 0.18 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.16 per unit of risk. If you would invest  1,206,000  in Hyundai Green Food on August 31, 2024 and sell it today you would earn a total of  159,000  from holding Hyundai Green Food or generate 13.18% return on investment over 90 days.

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

Hyundai Green Food  vs.  Samsung Electronics Co

Hyundai Green Food

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hyundai Green Food are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hyundai Green sustained solid returns over the last few months and may actually be approaching a breakup point.

Samsung Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsung Electronics 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 December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Hyundai Green and Samsung Electronics

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

The idea behind Hyundai Green Food and Samsung Electronics 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.