Correlation Between KyungIn Electronics and Samwha Electronics

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

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

Diversification Opportunities for KyungIn Electronics and Samwha Electronics

0.31

Correlation Coefficient

KyungIn Electronics  Samwha Electronics

Weak diversification

The 3 months correlation between KyungIn and Samwha is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding KyungIn Electronics Co and Samwha Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samwha Electronics and KyungIn 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 KyungIn Electronics Co are associated (or correlated) with Samwha Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samwha Electronics has no effect on the direction of KyungIn Electronics i.e., KyungIn Electronics and Samwha Electronics go up and down completely randomly.

Pair Corralation between KyungIn Electronics and Samwha Electronics

Assuming the 90 days trading horizon KyungIn Electronics is expected to generate 16.51 times less return on investment than Samwha Electronics. But when comparing it to its historical volatility, KyungIn Electronics Co is 1.87 times less risky than Samwha Electronics. It trades about 0.0 of its potential returns per unit of risk. Samwha Electronics Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  263,541  in Samwha Electronics Co on October 4, 2024 and sell it today you would earn a total of  54,959  from holding Samwha Electronics Co or generate 20.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

KyungIn Electronics Co  vs.  Samwha Electronics Co

KyungIn Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KyungIn Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KyungIn Electronics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Samwha Electronics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Samwha Electronics Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Samwha Electronics may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with KyungIn Electronics and Samwha Electronics

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

The idea behind KyungIn Electronics Co and Samwha 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.