Correlation Between Samick Musical and Korea Information
Can any of the company-specific risk be diversified away by investing in both Samick Musical and Korea Information 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 Korea Information 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 Korea Information Communications, you can compare the effects of market volatilities on Samick Musical and Korea Information 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and Korea Information.
Diversification Opportunities for Samick Musical and Korea Information
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samick and Korea is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Samick Musical i.e., Samick Musical and Korea Information go up and down completely randomly.
Pair Corralation between Samick Musical and Korea Information
Assuming the 90 days trading horizon Samick Musical Instruments is expected to generate 1.12 times more return on investment than Korea Information. However, Samick Musical is 1.12 times more volatile than Korea Information Communications. It trades about 0.19 of its potential returns per unit of risk. Korea Information Communications is currently generating about 0.2 per unit of risk. If you would invest 114,554 in Samick Musical Instruments on October 22, 2024 and sell it today you would earn a total of 4,046 from holding Samick Musical Instruments or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samick Musical Instruments vs. Korea Information Communicatio
Performance |
| Timeline |
| Samick Musical Instr |
| Korea Information |
Samick Musical and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samick Musical and Korea Information
The main advantage of trading using opposite Samick Musical and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.| Samick Musical vs. DONGKUK TED METAL | Samick Musical vs. Hanjoo Light Metal | Samick Musical vs. Automobile Pc | Samick Musical vs. Shinhan Inverse Copper |
| Korea Information vs. Nh Investment And | Korea Information vs. DSC Investment | Korea Information vs. Green Cross Medical | Korea Information vs. Korean Drug 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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