Correlation Between Samsung Electronics and Korea Ratings
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Korea Ratings 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 Samsung Electronics and Korea Ratings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Korea Ratings Co, you can compare the effects of market volatilities on Samsung Electronics and Korea Ratings 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 Samsung Electronics with a short position of Korea Ratings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Korea Ratings.
Diversification Opportunities for Samsung Electronics and Korea Ratings
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Korea is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Korea Ratings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Ratings and Samsung Electronics 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 Samsung Electronics Co are associated (or correlated) with Korea Ratings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Ratings has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Korea Ratings go up and down completely randomly.
Pair Corralation between Samsung Electronics and Korea Ratings
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Korea Ratings. In addition to that, Samsung Electronics is 2.25 times more volatile than Korea Ratings Co. It trades about -0.32 of its total potential returns per unit of risk. Korea Ratings Co is currently generating about 0.11 per unit of volatility. If you would invest 8,710,000 in Korea Ratings Co on September 22, 2024 and sell it today you would earn a total of 160,000 from holding Korea Ratings Co or generate 1.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Samsung Electronics Co vs. Korea Ratings Co
Performance |
Timeline |
Samsung Electronics |
Korea Ratings |
Samsung Electronics and Korea Ratings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Samsung Electronics and Korea Ratings
The main advantage of trading using opposite Samsung Electronics and Korea Ratings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Korea Ratings 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 Korea Ratings will offset losses from the drop in Korea Ratings' long position.Samsung Electronics vs. LG Corp | Samsung Electronics vs. Solution Advanced Technology | Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. Busan Ind |
Korea Ratings vs. Samsung Electronics Co | Korea Ratings vs. Samsung Electronics Co | Korea Ratings vs. LG Energy Solution | Korea Ratings vs. SK Hynix |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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