Correlation Between Samsung Electronics and Ilji Technology
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Ilji Technology 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 Ilji Technology 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 Ilji Technology Co, you can compare the effects of market volatilities on Samsung Electronics and Ilji Technology 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 Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Ilji Technology.
Diversification Opportunities for Samsung Electronics and Ilji Technology
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Ilji is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Ilji Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilji Technology 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 Ilji Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilji Technology has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Ilji Technology go up and down completely randomly.
Pair Corralation between Samsung Electronics and Ilji Technology
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.37 times more return on investment than Ilji Technology. However, Samsung Electronics is 1.37 times more volatile than Ilji Technology Co. It trades about 0.0 of its potential returns per unit of risk. Ilji Technology Co is currently generating about -0.1 per unit of risk. If you would invest 5,660,000 in Samsung Electronics Co on August 25, 2024 and sell it today you would lose (60,000) from holding Samsung Electronics Co or give up 1.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Ilji Technology Co
Performance |
| Timeline |
| Samsung Electronics |
| Ilji Technology |
Samsung Electronics and Ilji Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Ilji Technology
The main advantage of trading using opposite Samsung Electronics and Ilji Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Ilji Technology 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 Ilji Technology will offset losses from the drop in Ilji Technology's long position.| Samsung Electronics vs. Haesung Industrial Co | Samsung Electronics vs. Taeyang Metal Industrial | Samsung Electronics vs. Hanjin Transportation Co | Samsung Electronics vs. GS Retail Co |
| Ilji Technology vs. Busan Industrial Co | Ilji Technology vs. Busan Ind | Ilji Technology vs. Mirae Asset Daewoo | Ilji Technology vs. UNISEM 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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