Correlation Between Samsung Electronics and Dongkuk Structures
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Dongkuk Structures 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 Dongkuk Structures 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 Dongkuk Structures Construction, you can compare the effects of market volatilities on Samsung Electronics and Dongkuk Structures 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 Dongkuk Structures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Dongkuk Structures.
Diversification Opportunities for Samsung Electronics and Dongkuk Structures
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Dongkuk is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Dongkuk Structures Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongkuk Structures 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 Dongkuk Structures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongkuk Structures has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Dongkuk Structures go up and down completely randomly.
Pair Corralation between Samsung Electronics and Dongkuk Structures
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.89 times more return on investment than Dongkuk Structures. However, Samsung Electronics Co is 1.12 times less risky than Dongkuk Structures. It trades about -0.05 of its potential returns per unit of risk. Dongkuk Structures Construction is currently generating about -0.15 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Dongkuk Structures Constructio
Performance |
| Timeline |
| Samsung Electronics |
| Dongkuk Structures |
Samsung Electronics and Dongkuk Structures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Dongkuk Structures
The main advantage of trading using opposite Samsung Electronics and Dongkuk Structures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Dongkuk Structures 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 Dongkuk Structures will offset losses from the drop in Dongkuk Structures' 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 |
| Dongkuk Structures vs. Korea New Network | Dongkuk Structures vs. ICD Co | Dongkuk Structures vs. DYPNF CoLtd | Dongkuk Structures vs. Busan Industrial 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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