Correlation Between Samsung Electronics and Korea Refractories
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Korea Refractories 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 Refractories 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 Refractories Co, you can compare the effects of market volatilities on Samsung Electronics and Korea Refractories 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 Refractories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Korea Refractories.
Diversification Opportunities for Samsung Electronics and Korea Refractories
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and Korea is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Korea Refractories Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Refractories 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 Refractories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Refractories has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Korea Refractories go up and down completely randomly.
Pair Corralation between Samsung Electronics and Korea Refractories
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.88 times more return on investment than Korea Refractories. However, Samsung Electronics Co is 1.13 times less risky than Korea Refractories. It trades about -0.02 of its potential returns per unit of risk. Korea Refractories Co is currently generating about -0.06 per unit of risk. If you would invest 5,267,350 in Samsung Electronics Co on September 12, 2024 and sell it today you would lose (747,350) from holding Samsung Electronics Co or give up 14.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Korea Refractories Co
Performance |
| Timeline |
| Samsung Electronics |
| Korea Refractories |
Samsung Electronics and Korea Refractories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Korea Refractories
The main advantage of trading using opposite Samsung Electronics and Korea Refractories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Korea Refractories 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 Refractories will offset losses from the drop in Korea Refractories' long position.| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Solution Advanced Technology | Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. Busan Ind |
| Korea Refractories vs. Samsung Electronics Co | Korea Refractories vs. Samsung Electronics Co | Korea Refractories vs. SK Hynix | Korea Refractories 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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