Correlation Between Samsung Electronics and Kakaopay Corp
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Kakaopay Corp 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 Kakaopay Corp 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 kakaopay Corp, you can compare the effects of market volatilities on Samsung Electronics and Kakaopay Corp 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 Kakaopay Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Kakaopay Corp.
Diversification Opportunities for Samsung Electronics and Kakaopay Corp
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Kakaopay is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and kakaopay Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on kakaopay Corp 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 Kakaopay Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of kakaopay Corp has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Kakaopay Corp go up and down completely randomly.
Pair Corralation between Samsung Electronics and Kakaopay Corp
Assuming the 90 days trading horizon Samsung Electronics is expected to generate 3.92 times less return on investment than Kakaopay Corp. But when comparing it to its historical volatility, Samsung Electronics Co is 2.42 times less risky than Kakaopay Corp. It trades about 0.17 of its potential returns per unit of risk. kakaopay Corp is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,170,000 in kakaopay Corp on September 14, 2024 and sell it today you would earn a total of 860,000 from holding kakaopay Corp or generate 39.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. kakaopay Corp
Performance |
| Timeline |
| Samsung Electronics |
| kakaopay Corp |
Samsung Electronics and Kakaopay Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Kakaopay Corp
The main advantage of trading using opposite Samsung Electronics and Kakaopay Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Kakaopay Corp 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 Kakaopay Corp will offset losses from the drop in Kakaopay Corp's long position.| Samsung Electronics vs. Ssangyong Information Communication | Samsung Electronics vs. Woori Technology Investment | Samsung Electronics vs. Grand Korea Leisure | Samsung Electronics vs. Daelim Trading Co |
| Kakaopay Corp vs. CJ Seafood Corp | Kakaopay Corp vs. Seoul Food Industrial | Kakaopay Corp vs. Cots Technology Co | Kakaopay Corp vs. CU Tech Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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