Correlation Between Samsung Electronics and Tae Kwang
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Tae Kwang 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 Tae Kwang 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 Tae Kwang, you can compare the effects of market volatilities on Samsung Electronics and Tae Kwang 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 Tae Kwang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Tae Kwang.
Diversification Opportunities for Samsung Electronics and Tae Kwang
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and Tae is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Tae Kwang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tae Kwang 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 Tae Kwang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tae Kwang has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Tae Kwang go up and down completely randomly.
Pair Corralation between Samsung Electronics and Tae Kwang
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 25.99 times less return on investment than Tae Kwang. But when comparing it to its historical volatility, Samsung Electronics Co is 1.24 times less risky than Tae Kwang. It trades about 0.02 of its potential returns per unit of risk. Tae Kwang is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 1,239,000 in Tae Kwang on August 28, 2024 and sell it today you would earn a total of 411,000 from holding Tae Kwang or generate 33.17% 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. Tae Kwang
Performance |
| Timeline |
| Samsung Electronics |
| Tae Kwang |
Samsung Electronics and Tae Kwang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Tae Kwang
The main advantage of trading using opposite Samsung Electronics and Tae Kwang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Tae Kwang 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 Tae Kwang will offset losses from the drop in Tae Kwang's long position.| Samsung Electronics vs. JYP Entertainment | Samsung Electronics vs. Samsung Heavy Industries | Samsung Electronics vs. Hanjinkal |
| Tae Kwang vs. Sung Kwang Bend | Tae Kwang vs. Taewoong CoLtd | Tae Kwang vs. SFA Engineering | Tae Kwang vs. Soulbrain Holdings 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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