Correlation Between Samick Musical and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both Samick Musical and Kbi Metal 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 Kbi Metal 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 Kbi Metal Co, you can compare the effects of market volatilities on Samick Musical and Kbi Metal 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 Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and Kbi Metal.
Diversification Opportunities for Samick Musical and Kbi Metal
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samick and Kbi is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal 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 Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of Samick Musical i.e., Samick Musical and Kbi Metal go up and down completely randomly.
Pair Corralation between Samick Musical and Kbi Metal
Assuming the 90 days trading horizon Samick Musical Instruments is expected to generate 1.43 times more return on investment than Kbi Metal. However, Samick Musical is 1.43 times more volatile than Kbi Metal Co. It trades about 0.29 of its potential returns per unit of risk. Kbi Metal Co is currently generating about 0.26 per unit of risk. If you would invest 116,500 in Samick Musical Instruments on October 30, 2024 and sell it today you would earn a total of 33,600 from holding Samick Musical Instruments or generate 28.84% 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. Kbi Metal Co
Performance |
| Timeline |
| Samick Musical Instr |
| Kbi Metal |
Samick Musical and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samick Musical and Kbi Metal
The main advantage of trading using opposite Samick Musical and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical position performs unexpectedly, Kbi Metal 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 Kbi Metal will offset losses from the drop in Kbi Metal's long position.| Samick Musical vs. Digital Power Communications | Samick Musical vs. SH Energy Chemical | Samick Musical vs. Isu Chemical Co | Samick Musical vs. Seoul Electronics Telecom |
| Kbi Metal vs. Next Entertainment World | Kbi Metal vs. KTB Investment Securities | Kbi Metal vs. Daewon Media Co | Kbi Metal vs. SAMG Entertainment Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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