Correlation Between Kukdo Chemical and Samjin LND
Can any of the company-specific risk be diversified away by investing in both Kukdo Chemical and Samjin LND 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 Kukdo Chemical and Samjin LND into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdo Chemical Co and Samjin LND Co, you can compare the effects of market volatilities on Kukdo Chemical and Samjin LND 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 Kukdo Chemical with a short position of Samjin LND. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdo Chemical and Samjin LND.
Diversification Opportunities for Kukdo Chemical and Samjin LND
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kukdo and Samjin is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kukdo Chemical Co and Samjin LND Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samjin LND and Kukdo Chemical 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 Kukdo Chemical Co are associated (or correlated) with Samjin LND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samjin LND has no effect on the direction of Kukdo Chemical i.e., Kukdo Chemical and Samjin LND go up and down completely randomly.
Pair Corralation between Kukdo Chemical and Samjin LND
Assuming the 90 days trading horizon Kukdo Chemical Co is expected to generate 0.66 times more return on investment than Samjin LND. However, Kukdo Chemical Co is 1.51 times less risky than Samjin LND. It trades about -0.05 of its potential returns per unit of risk. Samjin LND Co is currently generating about -0.1 per unit of risk. If you would invest 3,881,167 in Kukdo Chemical Co on September 14, 2024 and sell it today you would lose (1,036,167) from holding Kukdo Chemical Co or give up 26.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdo Chemical Co vs. Samjin LND Co
Performance |
| Timeline |
| Kukdo Chemical |
| Samjin LND |
Kukdo Chemical and Samjin LND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdo Chemical and Samjin LND
The main advantage of trading using opposite Kukdo Chemical and Samjin LND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdo Chemical position performs unexpectedly, Samjin LND 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 Samjin LND will offset losses from the drop in Samjin LND's long position.| Kukdo Chemical vs. Samsung Electronics Co | Kukdo Chemical vs. Samsung Electronics Co | Kukdo Chemical vs. SK Hynix | Kukdo Chemical vs. POSCO Holdings |
| Samjin LND vs. SH Energy Chemical | Samjin LND vs. Miwon Chemical | Samjin LND vs. Hanil Chemical Ind | Samjin LND vs. Kukdo Chemical 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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