Correlation Between Samsung Electronics and Dongil Technology
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Dongil Technology 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 Dongil Technology 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 Dongil Technology, you can compare the effects of market volatilities on Samsung Electronics and Dongil Technology 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 Dongil Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Dongil Technology.
Diversification Opportunities for Samsung Electronics and Dongil Technology
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Dongil is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Dongil Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil Technology 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 Dongil Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Technology has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Dongil Technology go up and down completely randomly.
Pair Corralation between Samsung Electronics and Dongil Technology
Assuming the 90 days trading horizon Samsung Electronics Co is expected to under-perform the Dongil Technology. In addition to that, Samsung Electronics is 1.47 times more volatile than Dongil Technology. It trades about -0.06 of its total potential returns per unit of risk. Dongil Technology is currently generating about -0.02 per unit of volatility. If you would invest 1,004,418 in Dongil Technology on October 25, 2024 and sell it today you would lose (4,418) from holding Dongil Technology or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Dongil Technology
Performance |
| Timeline |
| Samsung Electronics |
| Dongil Technology |
Samsung Electronics and Dongil Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Dongil Technology
The main advantage of trading using opposite Samsung Electronics and Dongil Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Dongil Technology 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 Dongil Technology will offset losses from the drop in Dongil Technology's long position.The idea behind Samsung Electronics Co and Dongil Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Dongil Technology vs. Samsung Electronics Co | Dongil Technology vs. Samsung Electronics Co | Dongil Technology vs. SK Hynix | Dongil Technology vs. HMM 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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