Correlation Between Hana Microelectronics and Samart Digital

Can any of the company-specific risk be diversified away by investing in both Hana Microelectronics and Samart Digital 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 Hana Microelectronics and Samart Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hana Microelectronics Public and Samart Digital Public, you can compare the effects of market volatilities on Hana Microelectronics and Samart Digital 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 Hana Microelectronics with a short position of Samart Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Microelectronics and Samart Digital.

Diversification Opportunities for Hana Microelectronics and Samart Digital

-0.74

Correlation Coefficient

Hana Microelectronics  Samart Digital

Pay attention - limited upside

The 3 months correlation between Hana and Samart is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hana Microelectronics Public and Samart Digital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samart Digital Public and Hana Microelectronics 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 Hana Microelectronics Public are associated (or correlated) with Samart Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samart Digital Public has no effect on the direction of Hana Microelectronics i.e., Hana Microelectronics and Samart Digital go up and down completely randomly.

Pair Corralation between Hana Microelectronics and Samart Digital

Assuming the 90 days trading horizon Hana Microelectronics Public is expected to under-perform the Samart Digital. But the stock apears to be less risky and, when comparing its historical volatility, Hana Microelectronics Public is 7.73 times less risky than Samart Digital. The stock trades about -0.2 of its potential returns per unit of risk. The Samart Digital Public is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Samart Digital Public on September 14, 2024 and sell it today you would earn a total of  3.00  from holding Samart Digital Public or generate 150.0% return on investment over 90 days.

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

Hana Microelectronics Public  vs.  Samart Digital Public

Hana Microelectronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hana Microelectronics Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Samart Digital Public

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Samart Digital Public are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Samart Digital disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hana Microelectronics and Samart Digital

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

The idea behind Hana Microelectronics Public and Samart Digital Public 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.