Correlation Between Samhwa Paint and Kumho Industrial
Can any of the company-specific risk be diversified away by investing in both Samhwa Paint and Kumho Industrial 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 Samhwa Paint and Kumho Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samhwa Paint Industrial and Kumho Industrial Co, you can compare the effects of market volatilities on Samhwa Paint and Kumho Industrial 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 Samhwa Paint with a short position of Kumho Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samhwa Paint and Kumho Industrial.
Diversification Opportunities for Samhwa Paint and Kumho Industrial
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samhwa and Kumho is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Samhwa Paint Industrial and Kumho Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Industrial and Samhwa Paint 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 Samhwa Paint Industrial are associated (or correlated) with Kumho Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Industrial has no effect on the direction of Samhwa Paint i.e., Samhwa Paint and Kumho Industrial go up and down completely randomly.
Pair Corralation between Samhwa Paint and Kumho Industrial
Assuming the 90 days trading horizon Samhwa Paint Industrial is expected to under-perform the Kumho Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Samhwa Paint Industrial is 1.48 times less risky than Kumho Industrial. The stock trades about -0.19 of its potential returns per unit of risk. The Kumho Industrial Co is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 289,500 in Kumho Industrial Co on August 30, 2024 and sell it today you would earn a total of 23,000 from holding Kumho Industrial Co or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samhwa Paint Industrial vs. Kumho Industrial Co
Performance |
| Timeline |
| Samhwa Paint Industrial |
| Kumho Industrial |
Samhwa Paint and Kumho Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samhwa Paint and Kumho Industrial
The main advantage of trading using opposite Samhwa Paint and Kumho Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samhwa Paint position performs unexpectedly, Kumho Industrial 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 Kumho Industrial will offset losses from the drop in Kumho Industrial's long position.| Samhwa Paint vs. AptaBio Therapeutics | Samhwa Paint vs. Daewoo SBI SPAC | Samhwa Paint vs. Dream Security co | Samhwa Paint vs. Microfriend |
| Kumho Industrial vs. AptaBio Therapeutics | Kumho Industrial vs. Daewoo SBI SPAC | Kumho Industrial vs. Dream Security co | Kumho Industrial vs. Microfriend |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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