Correlation Between Samsung Electronics and Dongwon Ind
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Dongwon Ind 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 Samsung Electronics and Dongwon Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Dongwon Ind, you can compare the effects of market volatilities on Samsung Electronics and Dongwon Ind 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 Samsung Electronics with a short position of Dongwon Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Dongwon Ind.
Diversification Opportunities for Samsung Electronics and Dongwon Ind
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Dongwon is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Dongwon Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwon Ind and Samsung 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 Samsung Electronics Co are associated (or correlated) with Dongwon Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwon Ind has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Dongwon Ind go up and down completely randomly.
Pair Corralation between Samsung Electronics and Dongwon Ind
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.76 times more return on investment than Dongwon Ind. However, Samsung Electronics Co is 1.32 times less risky than Dongwon Ind. It trades about -0.01 of its potential returns per unit of risk. Dongwon Ind is currently generating about -0.01 per unit of risk. If you would invest 6,168,547 in Samsung Electronics Co on October 17, 2024 and sell it today you would lose (778,547) from holding Samsung Electronics Co or give up 12.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Dongwon Ind
Performance |
| Timeline |
| Samsung Electronics |
| Dongwon Ind |
Samsung Electronics and Dongwon Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Dongwon Ind
The main advantage of trading using opposite Samsung Electronics and Dongwon Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Dongwon Ind 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 Dongwon Ind will offset losses from the drop in Dongwon Ind's long position.| Samsung Electronics vs. Coloray International Investment | Samsung Electronics vs. Worldex Industry Trading | Samsung Electronics vs. TS Investment Corp | Samsung Electronics vs. DB Financial Investment |
| Dongwon Ind vs. Sewoon Medical Co | Dongwon Ind vs. Wireless Power Amplifier | Dongwon Ind vs. LG Display Co | Dongwon Ind vs. Asiana Airlines |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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