Correlation Between Samsung Electronics and Korea Real
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Korea Real 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 Real 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 Real Estate, you can compare the effects of market volatilities on Samsung Electronics and Korea Real 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 Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Korea Real.
Diversification Opportunities for Samsung Electronics and Korea Real
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Korea is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Korea Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Real Estate 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 Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Real Estate has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Korea Real go up and down completely randomly.
Pair Corralation between Samsung Electronics and Korea Real
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Korea Real. In addition to that, Samsung Electronics is 5.84 times more volatile than Korea Real Estate. It trades about -0.05 of its total potential returns per unit of risk. Korea Real Estate is currently generating about -0.04 per unit of volatility. If you would invest 100,000 in Korea Real Estate on November 3, 2024 and sell it today you would lose (200.00) from holding Korea Real Estate or give up 0.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Korea Real Estate
Performance |
| Timeline |
| Samsung Electronics |
| Korea Real Estate |
Samsung Electronics and Korea Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Korea Real
The main advantage of trading using opposite Samsung Electronics and Korea Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Korea Real 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 Real will offset losses from the drop in Korea Real's long position.| Samsung Electronics vs. Sangsin Energy Display | Samsung Electronics vs. Display Tech Co | Samsung Electronics vs. Iljin Display | Samsung Electronics vs. ITM Semiconductor Co |
| Korea Real vs. Daou Data Corp | Korea Real vs. Kbi Metal Co | Korea Real vs. Koryo Credit Information | Korea Real vs. Insung Information 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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