Correlation Between Samsung Card and Taegu Broadcasting

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

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

Diversification Opportunities for Samsung Card and Taegu Broadcasting

-0.59

Correlation Coefficient

Samsung Card  Taegu Broadcasting

Excellent diversification

The 3 months correlation between Samsung and Taegu is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Card Co and Taegu Broadcasting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taegu Broadcasting and Samsung Card 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 Card Co are associated (or correlated) with Taegu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taegu Broadcasting has no effect on the direction of Samsung Card i.e., Samsung Card and Taegu Broadcasting go up and down completely randomly.

Pair Corralation between Samsung Card and Taegu Broadcasting

Assuming the 90 days trading horizon Samsung Card Co is expected to under-perform the Taegu Broadcasting. In addition to that, Samsung Card is 1.03 times more volatile than Taegu Broadcasting. It trades about -0.04 of its total potential returns per unit of risk. Taegu Broadcasting is currently generating about 0.12 per unit of volatility. If you would invest  72,800  in Taegu Broadcasting on September 4, 2024 and sell it today you would earn a total of  8,000  from holding Taegu Broadcasting or generate 10.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Samsung Card Co  vs.  Taegu Broadcasting

Samsung Card

Risk-Adjusted Performance

0 of 100

Very Weak

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

Taegu Broadcasting

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Taegu Broadcasting are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Taegu Broadcasting may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Samsung Card and Taegu Broadcasting

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

The idea behind Samsung Card Co and Taegu Broadcasting 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.