Correlation Between Samsung Electronics and Jeju Air
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Jeju Air 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 Jeju Air 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 Jeju Air Co, you can compare the effects of market volatilities on Samsung Electronics and Jeju Air 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 Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Jeju Air.
Diversification Opportunities for Samsung Electronics and Jeju Air
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samsung and Jeju is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air 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 Jeju Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Air has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Jeju Air go up and down completely randomly.
Pair Corralation between Samsung Electronics and Jeju Air
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Jeju Air. In addition to that, Samsung Electronics is 1.36 times more volatile than Jeju Air Co. It trades about -0.09 of its total potential returns per unit of risk. Jeju Air Co is currently generating about -0.01 per unit of volatility. If you would invest 956,000 in Jeju Air Co on August 31, 2024 and sell it today you would lose (11,000) from holding Jeju Air Co or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Jeju Air Co
Performance |
| Timeline |
| Samsung Electronics |
| Jeju Air |
Samsung Electronics and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Jeju Air
The main advantage of trading using opposite Samsung Electronics and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Jeju Air 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 Jeju Air will offset losses from the drop in Jeju Air's long position.| Samsung Electronics vs. Dongsin Engineering Construction | Samsung Electronics vs. Doosan Fuel Cell | Samsung Electronics vs. Daishin Balance 1 | Samsung Electronics vs. Total Soft Bank |
| Jeju Air vs. Korea New Network | Jeju Air vs. ICD Co | Jeju Air vs. DYPNF CoLtd | Jeju Air vs. Busan Industrial 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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