Correlation Between Samsung Electronics and Koryo Credit
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Koryo Credit 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 Koryo Credit 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 Koryo Credit Information, you can compare the effects of market volatilities on Samsung Electronics and Koryo Credit 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 Koryo Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Koryo Credit.
Diversification Opportunities for Samsung Electronics and Koryo Credit
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Koryo is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Koryo Credit Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koryo Credit Information 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 Koryo Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koryo Credit Information has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Koryo Credit go up and down completely randomly.
Pair Corralation between Samsung Electronics and Koryo Credit
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 1.24 times less return on investment than Koryo Credit. In addition to that, Samsung Electronics is 2.31 times more volatile than Koryo Credit Information. It trades about 0.02 of its total potential returns per unit of risk. Koryo Credit Information is currently generating about 0.05 per unit of volatility. If you would invest 989,000 in Koryo Credit Information on August 29, 2024 and sell it today you would earn a total of 13,000 from holding Koryo Credit Information or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Koryo Credit Information
Performance |
| Timeline |
| Samsung Electronics |
| Koryo Credit Information |
Samsung Electronics and Koryo Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Koryo Credit
The main advantage of trading using opposite Samsung Electronics and Koryo Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Koryo Credit 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 Koryo Credit will offset losses from the drop in Koryo Credit's long position.| Samsung Electronics vs. Lotte Fine Chemical | Samsung Electronics vs. SH Energy Chemical | Samsung Electronics vs. Hansol Chemical Co | Samsung Electronics vs. Youngchang Chemical Co |
| Koryo Credit vs. Eagle Veterinary Technology | Koryo Credit vs. Daou Technology | Koryo Credit vs. NewFlex Technology Co | Koryo Credit vs. Puloon Technology |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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