Correlation Between Samsung Electronics and CKH Food
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and CKH Food 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 CKH Food 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 CKH Food Health, you can compare the effects of market volatilities on Samsung Electronics and CKH Food 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 CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and CKH Food.
Diversification Opportunities for Samsung Electronics and CKH Food
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and CKH is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and CKH Food Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKH Food Health 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 CKH Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKH Food Health has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and CKH Food go up and down completely randomly.
Pair Corralation between Samsung Electronics and CKH Food
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 0.49 times more return on investment than CKH Food. However, Samsung Electronics Co is 2.05 times less risky than CKH Food. It trades about -0.02 of its potential returns per unit of risk. CKH Food Health is currently generating about -0.06 per unit of risk. If you would invest 5,439,889 in Samsung Electronics Co on September 1, 2024 and sell it today you would lose (819,889) from holding Samsung Electronics Co or give up 15.07% 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. CKH Food Health
Performance |
| Timeline |
| Samsung Electronics |
| CKH Food Health |
Samsung Electronics and CKH Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and CKH Food
The main advantage of trading using opposite Samsung Electronics and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, CKH Food 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 CKH Food will offset losses from the drop in CKH Food'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 |
| CKH Food vs. Korea Real Estate | CKH Food vs. Korea Ratings Co | CKH Food vs. IQuest Co | CKH Food vs. Wonbang Tech 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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