Correlation Between Samsung Electronics and ENERGYMACHINERY KOREA
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA CoLtd, you can compare the effects of market volatilities on Samsung Electronics and ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and ENERGYMACHINERY KOREA.
Diversification Opportunities for Samsung Electronics and ENERGYMACHINERY KOREA
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and ENERGYMACHINERY is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and ENERGYMACHINERY KOREA CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENERGYMACHINERY KOREA has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and ENERGYMACHINERY KOREA go up and down completely randomly.
Pair Corralation between Samsung Electronics and ENERGYMACHINERY KOREA
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 1.15 times more return on investment than ENERGYMACHINERY KOREA. However, Samsung Electronics is 1.15 times more volatile than ENERGYMACHINERY KOREA CoLtd. It trades about -0.05 of its potential returns per unit of risk. ENERGYMACHINERY KOREA CoLtd is currently generating about -0.26 per unit of risk. If you would invest 4,795,000 in Samsung Electronics Co on September 1, 2024 and sell it today you would lose (175,000) from holding Samsung Electronics Co or give up 3.65% 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. ENERGYMACHINERY KOREA CoLtd
Performance |
| Timeline |
| Samsung Electronics |
| ENERGYMACHINERY KOREA |
Samsung Electronics and ENERGYMACHINERY KOREA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and ENERGYMACHINERY KOREA
The main advantage of trading using opposite Samsung Electronics and ENERGYMACHINERY KOREA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA will offset losses from the drop in ENERGYMACHINERY KOREA's long position.| Samsung Electronics vs. Seoul Electronics Telecom | Samsung Electronics vs. Ni Steel | Samsung Electronics vs. CKH Food Health | Samsung Electronics vs. Daedong Steel Co |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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