Correlation Between Samsung Electronics and KG Eco
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and KG Eco 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 KG Eco 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 KG Eco Technology, you can compare the effects of market volatilities on Samsung Electronics and KG Eco 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 KG Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and KG Eco.
Diversification Opportunities for Samsung Electronics and KG Eco
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and 151860 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and KG Eco Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KG Eco 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 KG Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KG Eco Technology has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and KG Eco go up and down completely randomly.
Pair Corralation between Samsung Electronics and KG Eco
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.75 times more return on investment than KG Eco. However, Samsung Electronics Co is 1.34 times less risky than KG Eco. It trades about -0.03 of its potential returns per unit of risk. KG Eco Technology is currently generating about -0.11 per unit of risk. If you would invest 5,732,000 in Samsung Electronics Co on August 29, 2024 and sell it today you would lose (832,000) from holding Samsung Electronics Co or give up 14.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.58% |
| Values | Daily Returns |
Samsung Electronics Co vs. KG Eco Technology
Performance |
| Timeline |
| Samsung Electronics |
| KG Eco Technology |
Samsung Electronics and KG Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and KG Eco
The main advantage of trading using opposite Samsung Electronics and KG Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, KG Eco 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 KG Eco will offset losses from the drop in KG Eco's long position.| Samsung Electronics vs. Nice Information Telecommunication | Samsung Electronics vs. Mobile Appliance | Samsung Electronics vs. Korea Shipbuilding Offshore | Samsung Electronics vs. Daou Technology |
| KG Eco vs. KB Financial Group | KG Eco vs. Shinhan Financial Group | KG Eco vs. Hana Financial | KG Eco vs. Woori Financial Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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