Correlation Between Kukdong Oil and Samick Musical
Can any of the company-specific risk be diversified away by investing in both Kukdong Oil and Samick Musical 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 Kukdong Oil and Samick Musical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdong Oil Chemicals and Samick Musical Instruments, you can compare the effects of market volatilities on Kukdong Oil and Samick Musical 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 Kukdong Oil with a short position of Samick Musical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdong Oil and Samick Musical.
Diversification Opportunities for Kukdong Oil and Samick Musical
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kukdong and Samick is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kukdong Oil Chemicals and Samick Musical Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samick Musical Instr and Kukdong Oil 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 Kukdong Oil Chemicals are associated (or correlated) with Samick Musical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samick Musical Instr has no effect on the direction of Kukdong Oil i.e., Kukdong Oil and Samick Musical go up and down completely randomly.
Pair Corralation between Kukdong Oil and Samick Musical
Assuming the 90 days trading horizon Kukdong Oil Chemicals is expected to under-perform the Samick Musical. In addition to that, Kukdong Oil is 2.41 times more volatile than Samick Musical Instruments. It trades about -0.06 of its total potential returns per unit of risk. Samick Musical Instruments is currently generating about 0.05 per unit of volatility. If you would invest 106,900 in Samick Musical Instruments on September 12, 2024 and sell it today you would earn a total of 1,800 from holding Samick Musical Instruments or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdong Oil Chemicals vs. Samick Musical Instruments
Performance |
| Timeline |
| Kukdong Oil Chemicals |
| Samick Musical Instr |
Kukdong Oil and Samick Musical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdong Oil and Samick Musical
The main advantage of trading using opposite Kukdong Oil and Samick Musical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdong Oil position performs unexpectedly, Samick Musical 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 Samick Musical will offset losses from the drop in Samick Musical's long position.| Kukdong Oil vs. Samsung Electronics Co | Kukdong Oil vs. Samsung Electronics Co | Kukdong Oil vs. SK Hynix | Kukdong Oil vs. POSCO Holdings |
| Samick Musical vs. Samsung Electronics Co | Samick Musical vs. Samsung Electronics Co | Samick Musical vs. SK Hynix | Samick Musical vs. POSCO Holdings |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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