Correlation Between Samsung Electronics and Seoul Food
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Seoul Food 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 Seoul Food 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 Seoul Food Industrial, you can compare the effects of market volatilities on Samsung Electronics and Seoul Food 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 Seoul Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Seoul Food.
Diversification Opportunities for Samsung Electronics and Seoul Food
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samsung and Seoul is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Seoul Food Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Food Industrial 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 Seoul Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Food Industrial has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Seoul Food go up and down completely randomly.
Pair Corralation between Samsung Electronics and Seoul Food
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 2.43 times more return on investment than Seoul Food. However, Samsung Electronics is 2.43 times more volatile than Seoul Food Industrial. It trades about 0.16 of its potential returns per unit of risk. Seoul Food Industrial is currently generating about 0.2 per unit of risk. If you would invest 4,180,000 in Samsung Electronics Co on December 4, 2024 and sell it today you would earn a total of 290,000 from holding Samsung Electronics Co or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Seoul Food Industrial
Performance |
| Timeline |
| Samsung Electronics |
| Seoul Food Industrial |
Samsung Electronics and Seoul Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Seoul Food
The main advantage of trading using opposite Samsung Electronics and Seoul Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Seoul Food 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 Seoul Food will offset losses from the drop in Seoul Food's long position.| Samsung Electronics vs. Kisan Telecom Co | Samsung Electronics vs. Daishin Information Communications | Samsung Electronics vs. SK Telecom Co | Samsung Electronics vs. Hyundai Engineering Plastics |
| Seoul Food vs. AptaBio Therapeutics | Seoul Food vs. Daewoo SBI SPAC | Seoul Food vs. Dream Security co | Seoul Food vs. Microfriend |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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