Correlation Between Samsung Electronics and Korea Shipbuilding
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Korea Shipbuilding 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 Korea Shipbuilding 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 Korea Shipbuilding Offshore, you can compare the effects of market volatilities on Samsung Electronics and Korea Shipbuilding 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 Korea Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Korea Shipbuilding.
Diversification Opportunities for Samsung Electronics and Korea Shipbuilding
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Korea is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Korea Shipbuilding Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Shipbuilding 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 Korea Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Shipbuilding has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Korea Shipbuilding go up and down completely randomly.
Pair Corralation between Samsung Electronics and Korea Shipbuilding
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Korea Shipbuilding. In addition to that, Samsung Electronics is 1.04 times more volatile than Korea Shipbuilding Offshore. It trades about -0.1 of its total potential returns per unit of risk. Korea Shipbuilding Offshore is currently generating about 0.2 per unit of volatility. If you would invest 18,810,000 in Korea Shipbuilding Offshore on August 30, 2024 and sell it today you would earn a total of 2,340,000 from holding Korea Shipbuilding Offshore or generate 12.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Korea Shipbuilding Offshore
Performance |
| Timeline |
| Samsung Electronics |
| Korea Shipbuilding |
Samsung Electronics and Korea Shipbuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Korea Shipbuilding
The main advantage of trading using opposite Samsung Electronics and Korea Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Korea Shipbuilding 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 Shipbuilding will offset losses from the drop in Korea Shipbuilding's long position.| Samsung Electronics vs. Finebesteel | Samsung Electronics vs. Dongil Metal Co | Samsung Electronics vs. MetaLabs Co | Samsung Electronics vs. Youngsin Metal Industrial |
| Korea Shipbuilding vs. Samsung Electronics Co | Korea Shipbuilding vs. Samsung Electronics Co | Korea Shipbuilding vs. KB Financial Group | Korea Shipbuilding vs. Shinhan Financial Group |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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