Correlation Between 456680 and Samsung KODEX

Can any of the company-specific risk be diversified away by investing in both 456680 and Samsung KODEX 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 456680 and Samsung KODEX into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 456680 and Samsung KODEX IT, you can compare the effects of market volatilities on 456680 and Samsung KODEX 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 456680 with a short position of Samsung KODEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of 456680 and Samsung KODEX.

Diversification Opportunities for 456680 and Samsung KODEX

-0.5

Correlation Coefficient

456680  Samsung KODEX

Very good diversification

The 3 months correlation between 456680 and Samsung is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding 456680 and Samsung KODEX IT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung KODEX IT and 456680 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 456680 are associated (or correlated) with Samsung KODEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung KODEX IT has no effect on the direction of 456680 i.e., 456680 and Samsung KODEX go up and down completely randomly.

Pair Corralation between 456680 and Samsung KODEX

Assuming the 90 days trading horizon 456680 is expected to generate 2.21 times more return on investment than Samsung KODEX. However, 456680 is 2.21 times more volatile than Samsung KODEX IT. It trades about -0.03 of its potential returns per unit of risk. Samsung KODEX IT is currently generating about -0.09 per unit of risk. If you would invest  610,000  in 456680 on October 10, 2024 and sell it today you would lose (61,500) from holding 456680 or give up 10.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

456680  vs.  Samsung KODEX IT

456680

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 456680 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 456680 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Samsung KODEX IT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsung KODEX IT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with 456680 and Samsung KODEX

The main advantage of trading using opposite 456680 and Samsung KODEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 456680 position performs unexpectedly, Samsung KODEX 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 KODEX will offset losses from the drop in Samsung KODEX's long position.

The idea behind 456680 and Samsung KODEX IT 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.