Correlation Between Jeong Moon and Samsung CT

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

By analyzing existing cross correlation between Jeong Moon Information and Samsung CT Corp, you can compare the effects of market volatilities on Jeong Moon and Samsung CT 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 Jeong Moon with a short position of Samsung CT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeong Moon and Samsung CT.

Diversification Opportunities for Jeong Moon and Samsung CT

0.38

Correlation Coefficient

Jeong Moon  Samsung CT

Weak diversification

The 3 months correlation between Jeong and Samsung is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Jeong Moon Information and Samsung CT Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung CT Corp and Jeong Moon 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 Jeong Moon Information are associated (or correlated) with Samsung CT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung CT Corp has no effect on the direction of Jeong Moon i.e., Jeong Moon and Samsung CT go up and down completely randomly.

Pair Corralation between Jeong Moon and Samsung CT

Assuming the 90 days trading horizon Jeong Moon Information is expected to under-perform the Samsung CT. In addition to that, Jeong Moon is 1.28 times more volatile than Samsung CT Corp. It trades about -0.02 of its total potential returns per unit of risk. Samsung CT Corp is currently generating about 0.01 per unit of volatility. If you would invest  12,145,400  in Samsung CT Corp on December 3, 2024 and sell it today you would earn a total of  4,600  from holding Samsung CT Corp or generate 0.04% return on investment over 90 days.

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

Jeong Moon Information  vs.  Samsung CT Corp

Jeong Moon Information

Risk-Adjusted Performance

Very Weak

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

Samsung CT Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Jeong Moon and Samsung CT

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

The idea behind Jeong Moon Information and Samsung CT Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.