Correlation Between Kia Corp and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Kia Corp and Samsung 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 Kia Corp and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kia Corp and Samsung Electronics Co, you can compare the effects of market volatilities on Kia Corp and Samsung 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 Kia Corp with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kia Corp and Samsung Electronics.
Diversification Opportunities for Kia Corp and Samsung Electronics
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kia and Samsung is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kia Corp and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Kia Corp 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 Kia Corp are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Kia Corp i.e., Kia Corp and Samsung Electronics go up and down completely randomly.
Pair Corralation between Kia Corp and Samsung Electronics
Assuming the 90 days trading horizon Kia Corp is expected to generate 1.0 times more return on investment than Samsung Electronics. However, Kia Corp is 1.0 times less risky than Samsung Electronics. It trades about 0.02 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.08 per unit of risk. If you would invest 9,500,000 in Kia Corp on November 6, 2024 and sell it today you would earn a total of 110,000 from holding Kia Corp or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kia Corp vs. Samsung Electronics Co
Performance |
| Timeline |
| Kia Corp |
| Samsung Electronics |
Kia Corp and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kia Corp and Samsung Electronics
The main advantage of trading using opposite Kia Corp and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kia Corp position performs unexpectedly, Samsung 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Kia Corp vs. Iljin Display | Kia Corp vs. BIT Computer Co | Kia Corp vs. Nasmedia Co | Kia Corp vs. Daesung Hi Tech Co |
| Samsung Electronics vs. Hyundai Green Food | Samsung Electronics vs. Samyang Foods Co | Samsung Electronics vs. Finebesteel | Samsung Electronics vs. Husteel |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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