Correlation Between Samick Musical and Kyeryong Construction
Can any of the company-specific risk be diversified away by investing in both Samick Musical and Kyeryong Construction 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 Samick Musical and Kyeryong Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samick Musical Instruments and Kyeryong Construction Industrial, you can compare the effects of market volatilities on Samick Musical and Kyeryong Construction 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 Samick Musical with a short position of Kyeryong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and Kyeryong Construction.
Diversification Opportunities for Samick Musical and Kyeryong Construction
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samick and Kyeryong is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments and Kyeryong Construction Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyeryong Construction and Samick Musical 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 Samick Musical Instruments are associated (or correlated) with Kyeryong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyeryong Construction has no effect on the direction of Samick Musical i.e., Samick Musical and Kyeryong Construction go up and down completely randomly.
Pair Corralation between Samick Musical and Kyeryong Construction
Assuming the 90 days trading horizon Samick Musical Instruments is expected to generate 1.16 times more return on investment than Kyeryong Construction. However, Samick Musical is 1.16 times more volatile than Kyeryong Construction Industrial. It trades about 0.19 of its potential returns per unit of risk. Kyeryong Construction Industrial is currently generating about 0.06 per unit of risk. If you would invest 110,800 in Samick Musical Instruments on September 21, 2024 and sell it today you would earn a total of 9,600 from holding Samick Musical Instruments or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samick Musical Instruments vs. Kyeryong Construction Industri
Performance |
| Timeline |
| Samick Musical Instr |
| Kyeryong Construction |
Samick Musical and Kyeryong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samick Musical and Kyeryong Construction
The main advantage of trading using opposite Samick Musical and Kyeryong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical position performs unexpectedly, Kyeryong Construction 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 Kyeryong Construction will offset losses from the drop in Kyeryong Construction's long position.| Samick Musical vs. Foodnamoo | Samick Musical vs. Sempio Foods Co | Samick Musical vs. Hyundai Green Food | Samick Musical vs. Korea Information Communications |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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