Correlation Between Samsung Electronics and Kg Chemical
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Kg Chemical 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 Kg Chemical 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 Kg Chemical, you can compare the effects of market volatilities on Samsung Electronics and Kg Chemical 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 Kg Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Kg Chemical.
Diversification Opportunities for Samsung Electronics and Kg Chemical
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and 001390 is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Kg Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kg Chemical 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 Kg Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kg Chemical has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Kg Chemical go up and down completely randomly.
Pair Corralation between Samsung Electronics and Kg Chemical
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 2.72 times less return on investment than Kg Chemical. In addition to that, Samsung Electronics is 1.41 times more volatile than Kg Chemical. It trades about 0.1 of its total potential returns per unit of risk. Kg Chemical is currently generating about 0.39 per unit of volatility. If you would invest 346,735 in Kg Chemical on October 11, 2024 and sell it today you would earn a total of 37,265 from holding Kg Chemical or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Kg Chemical
Performance |
| Timeline |
| Samsung Electronics |
| Kg Chemical |
Samsung Electronics and Kg Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Kg Chemical
The main advantage of trading using opposite Samsung Electronics and Kg Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Kg Chemical 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 Kg Chemical will offset losses from the drop in Kg Chemical's long position.| Samsung Electronics vs. Top Material Co | Samsung Electronics vs. SH Energy Chemical | Samsung Electronics vs. PI Advanced Materials | Samsung Electronics vs. Kukdo Chemical Co |
| Kg Chemical vs. INNOX Advanced Materials | Kg Chemical vs. Sempio Foods Co | Kg Chemical vs. RF Materials Co | Kg Chemical vs. Ssangyong Materials Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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