Correlation Between Samsung Electronics and Korea Gas
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Korea Gas 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 Gas 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 Gas, you can compare the effects of market volatilities on Samsung Electronics and Korea Gas 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 Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Korea Gas.
Diversification Opportunities for Samsung Electronics and Korea Gas
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Korea is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Korea Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Gas 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 Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Gas has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Korea Gas go up and down completely randomly.
Pair Corralation between Samsung Electronics and Korea Gas
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.32 times more return on investment than Korea Gas. However, Samsung Electronics Co is 3.1 times less risky than Korea Gas. It trades about 0.19 of its potential returns per unit of risk. Korea Gas is currently generating about -0.13 per unit of risk. If you would invest 4,385,000 in Samsung Electronics Co on November 18, 2024 and sell it today you would earn a total of 210,000 from holding Samsung Electronics Co or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Korea Gas
Performance |
| Timeline |
| Samsung Electronics |
| Korea Gas |
Samsung Electronics and Korea Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Korea Gas
The main advantage of trading using opposite Samsung Electronics and Korea Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Korea Gas 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 Gas will offset losses from the drop in Korea Gas' long position.| Samsung Electronics vs. Seoul Electronics Telecom | Samsung Electronics vs. SungMoon Electronics Co | Samsung Electronics vs. Wave Electronics Co | Samsung Electronics vs. ABCO Electronics Co |
| Korea Gas vs. Hanjoo Light Metal | Korea Gas vs. PJ Metal Co | Korea Gas vs. Samick Musical Instruments | Korea Gas vs. Daishin Information Communications |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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