Correlation Between Samsung Electronics and Korea Investment
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Korea Investment 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 Investment 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 Investment Holdings, you can compare the effects of market volatilities on Samsung Electronics and Korea Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Korea Investment.
Diversification Opportunities for Samsung Electronics and Korea Investment
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and Korea is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Korea Investment Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Investment Holdings 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Investment Holdings has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Korea Investment go up and down completely randomly.
Pair Corralation between Samsung Electronics and Korea Investment
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Korea Investment. In addition to that, Samsung Electronics is 1.27 times more volatile than Korea Investment Holdings. It trades about -0.04 of its total potential returns per unit of risk. Korea Investment Holdings is currently generating about 0.08 per unit of volatility. If you would invest 4,210,695 in Korea Investment Holdings on September 14, 2024 and sell it today you would earn a total of 1,339,305 from holding Korea Investment Holdings or generate 31.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Korea Investment Holdings
Performance |
| Timeline |
| Samsung Electronics |
| Korea Investment Holdings |
Samsung Electronics and Korea Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Korea Investment
The main advantage of trading using opposite Samsung Electronics and Korea Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Korea Investment 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 Investment will offset losses from the drop in Korea Investment's long position.| Samsung Electronics vs. Anam Electronics Co | Samsung Electronics vs. Daejoo Electronic Materials | Samsung Electronics vs. CG Hi Tech | Samsung Electronics vs. Samsung Electronics Co |
| Korea Investment vs. Samsung Electronics Co | Korea Investment vs. Samsung Electronics Co | Korea Investment vs. SK Hynix | Korea Investment 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |