Correlation Between Samick Musical and Hana Financial

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Can any of the company-specific risk be diversified away by investing in both Samick Musical and Hana Financial 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 Samick Musical and Hana Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samick Musical Instruments and Hana Financial, you can compare the effects of market volatilities on Samick Musical and Hana Financial 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 Samick Musical with a short position of Hana Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and Hana Financial.

Diversification Opportunities for Samick Musical and Hana Financial

0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Samick and Hana is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments and Hana Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Financial and Samick Musical 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 Samick Musical Instruments are associated (or correlated) with Hana Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Financial has no effect on the direction of Samick Musical i.e., Samick Musical and Hana Financial go up and down completely randomly.

Pair Corralation between Samick Musical and Hana Financial

Assuming the 90 days trading horizon Samick Musical is expected to generate 1.15 times less return on investment than Hana Financial. But when comparing it to its historical volatility, Samick Musical Instruments is 3.44 times less risky than Hana Financial. It trades about 0.03 of its potential returns per unit of risk. Hana Financial is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  6,160,000  in Hana Financial on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Hana Financial or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Samick Musical Instruments  vs.  Hana Financial

 Performance 
       Timeline  
Samick Musical Instr 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Samick Musical Instruments are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samick Musical may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Hana Financial 

Risk-Adjusted Performance

4 of 100

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

Samick Musical and Hana Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Samick Musical and Hana Financial

The main advantage of trading using opposite Samick Musical and Hana Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical position performs unexpectedly, Hana Financial 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 Hana Financial will offset losses from the drop in Hana Financial's long position.
The idea behind Samick Musical Instruments and Hana Financial 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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