Correlation Between Samsung Electronics and Korea New
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Korea New 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 New 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 New Network, you can compare the effects of market volatilities on Samsung Electronics and Korea New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Korea New.
Diversification Opportunities for Samsung Electronics and Korea New
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Korea is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Korea New Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea New Network 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea New Network has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Korea New go up and down completely randomly.
Pair Corralation between Samsung Electronics and Korea New
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.8 times more return on investment than Korea New. However, Samsung Electronics Co is 1.24 times less risky than Korea New. It trades about 0.01 of its potential returns per unit of risk. Korea New Network is currently generating about 0.0 per unit of risk. If you would invest 5,679,327 in Samsung Electronics Co on August 29, 2024 and sell it today you would earn a total of 150,673 from holding Samsung Electronics Co or generate 2.65% 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 New Network
Performance |
| Timeline |
| Samsung Electronics |
| Korea New Network |
Samsung Electronics and Korea New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Korea New
The main advantage of trading using opposite Samsung Electronics and Korea New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Korea New 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 New will offset losses from the drop in Korea New's long position.| Samsung Electronics vs. Chin Yang Chemical | Samsung Electronics vs. Dongbang Transport Logistics | Samsung Electronics vs. Shinhan Inverse Silver | Samsung Electronics vs. JC Chemical Co |
| Korea New vs. Hyundai Engineering Plastics | Korea New vs. Dongwon Metal Co | Korea New vs. Taeyang Metal Industrial | Korea New vs. LS Materials |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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