Correlation Between Samsung Electronics and BooKook Steel
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and BooKook Steel 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 BooKook Steel 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 BooKook Steel Co, you can compare the effects of market volatilities on Samsung Electronics and BooKook Steel 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 BooKook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and BooKook Steel.
Diversification Opportunities for Samsung Electronics and BooKook Steel
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and BooKook is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and BooKook Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BooKook Steel 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 BooKook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BooKook Steel has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and BooKook Steel go up and down completely randomly.
Pair Corralation between Samsung Electronics and BooKook Steel
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.6 times more return on investment than BooKook Steel. However, Samsung Electronics Co is 1.67 times less risky than BooKook Steel. It trades about 0.01 of its potential returns per unit of risk. BooKook Steel Co is currently generating about -0.01 per unit of risk. If you would invest 5,573,799 in Samsung Electronics Co on September 13, 2024 and sell it today you would earn a total of 16,201 from holding Samsung Electronics Co or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. BooKook Steel Co
Performance |
| Timeline |
| Samsung Electronics |
| BooKook Steel |
Samsung Electronics and BooKook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and BooKook Steel
The main advantage of trading using opposite Samsung Electronics and BooKook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, BooKook Steel 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 BooKook Steel will offset losses from the drop in BooKook Steel's long position.| Samsung Electronics vs. Korea Air Svc | Samsung Electronics vs. Display Tech Co | Samsung Electronics vs. PLAYWITH | Samsung Electronics vs. Chorokbaem Healthcare Co |
| BooKook Steel vs. Samsung Electronics Co | BooKook Steel vs. Samsung Electronics Co | BooKook Steel vs. SK Hynix | BooKook Steel vs. POSCO Holdings |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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