Correlation Between Samyoung Electronics and Korea Information
Can any of the company-specific risk be diversified away by investing in both Samyoung Electronics 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 Samyoung Electronics and Korea Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samyoung Electronics Co and Korea Information Engineering, you can compare the effects of market volatilities on Samyoung Electronics 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 Samyoung Electronics with a short position of Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyoung Electronics and Korea Information.
Diversification Opportunities for Samyoung Electronics and Korea Information
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Samyoung and Korea is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Samyoung Electronics Co and Korea Information Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information and Samyoung Electronics 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 Samyoung Electronics Co 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 Samyoung Electronics i.e., Samyoung Electronics and Korea Information go up and down completely randomly.
Pair Corralation between Samyoung Electronics and Korea Information
Assuming the 90 days trading horizon Samyoung Electronics is expected to generate 1.18 times less return on investment than Korea Information. But when comparing it to its historical volatility, Samyoung Electronics Co is 1.76 times less risky than Korea Information. It trades about 0.3 of its potential returns per unit of risk. Korea Information Engineering is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 250,000 in Korea Information Engineering on November 9, 2024 and sell it today you would earn a total of 16,000 from holding Korea Information Engineering or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samyoung Electronics Co vs. Korea Information Engineering
Performance |
| Timeline |
| Samyoung Electronics |
| Korea Information |
Samyoung Electronics and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyoung Electronics and Korea Information
The main advantage of trading using opposite Samyoung Electronics and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyoung Electronics 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.| Samyoung Electronics vs. YeaRimDang Publishing Co | Samyoung Electronics vs. Digital Multimedia Technology | Samyoung Electronics vs. Alton Sports CoLtd | Samyoung Electronics vs. Clean Science co |
| Korea Information vs. Miwon Chemicals Co | Korea Information vs. Sung Bo Chemicals | Korea Information vs. Pan Entertainment Co | Korea Information vs. TJ media 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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