Correlation Between Samsung Electronics and Kaonmedia
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Kaonmedia 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 Kaonmedia 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 Kaonmedia Co, you can compare the effects of market volatilities on Samsung Electronics and Kaonmedia 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 Kaonmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Kaonmedia.
Diversification Opportunities for Samsung Electronics and Kaonmedia
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Kaonmedia is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Kaonmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaonmedia 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 Kaonmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaonmedia has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Kaonmedia go up and down completely randomly.
Pair Corralation between Samsung Electronics and Kaonmedia
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Kaonmedia. In addition to that, Samsung Electronics is 1.21 times more volatile than Kaonmedia Co. It trades about -0.17 of its total potential returns per unit of risk. Kaonmedia Co is currently generating about -0.16 per unit of volatility. If you would invest 322,500 in Kaonmedia Co on November 7, 2024 and sell it today you would lose (14,000) from holding Kaonmedia Co or give up 4.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Kaonmedia Co
Performance |
| Timeline |
| Samsung Electronics |
| Kaonmedia |
Samsung Electronics and Kaonmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Kaonmedia
The main advantage of trading using opposite Samsung Electronics and Kaonmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Kaonmedia 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 Kaonmedia will offset losses from the drop in Kaonmedia's long position.| Samsung Electronics vs. SK Chemicals Co | Samsung Electronics vs. LAKE MATERIALS LTD | Samsung Electronics vs. TK Chemical | Samsung Electronics vs. SAMG Entertainment Co |
| Kaonmedia vs. Samsung Electronics Co | Kaonmedia vs. Samsung Electronics Co | Kaonmedia vs. Hyundai Motor Co | Kaonmedia vs. LG Electronics |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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