Correlation Between Samick Musical and Kukdong Oil
Can any of the company-specific risk be diversified away by investing in both Samick Musical and Kukdong Oil 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 Kukdong Oil 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 Kukdong Oil Chemicals, you can compare the effects of market volatilities on Samick Musical and Kukdong Oil 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 Kukdong Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and Kukdong Oil.
Diversification Opportunities for Samick Musical and Kukdong Oil
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samick and Kukdong is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments and Kukdong Oil Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdong Oil Chemicals 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 Kukdong Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdong Oil Chemicals has no effect on the direction of Samick Musical i.e., Samick Musical and Kukdong Oil go up and down completely randomly.
Pair Corralation between Samick Musical and Kukdong Oil
Assuming the 90 days trading horizon Samick Musical Instruments is expected to generate 1.87 times more return on investment than Kukdong Oil. However, Samick Musical is 1.87 times more volatile than Kukdong Oil Chemicals. It trades about 0.14 of its potential returns per unit of risk. Kukdong Oil Chemicals is currently generating about 0.17 per unit of risk. If you would invest 113,308 in Samick Musical Instruments on October 15, 2024 and sell it today you would earn a total of 4,292 from holding Samick Musical Instruments or generate 3.79% 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. Kukdong Oil Chemicals
Performance |
| Timeline |
| Samick Musical Instr |
| Kukdong Oil Chemicals |
Samick Musical and Kukdong Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samick Musical and Kukdong Oil
The main advantage of trading using opposite Samick Musical and Kukdong Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical position performs unexpectedly, Kukdong Oil 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 Kukdong Oil will offset losses from the drop in Kukdong Oil's long position.| Samick Musical vs. Chorokbaem Healthcare Co | Samick Musical vs. Seoyon Topmetal Co | Samick Musical vs. Heungkuk Metaltech CoLtd | Samick Musical vs. Youngsin Metal Industrial |
| Kukdong Oil vs. BGF Retail Co | Kukdong Oil vs. HB Technology TD | Kukdong Oil vs. Samick Musical Instruments | Kukdong Oil vs. Ssangyong Information Communication |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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