Correlation Between Kukdong Oil and Samsung Publishing
Can any of the company-specific risk be diversified away by investing in both Kukdong Oil and Samsung Publishing 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 Samsung Publishing 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 Samsung Publishing Co, you can compare the effects of market volatilities on Kukdong Oil and Samsung Publishing 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 Samsung Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdong Oil and Samsung Publishing.
Diversification Opportunities for Kukdong Oil and Samsung Publishing
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kukdong and Samsung is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kukdong Oil Chemicals and Samsung Publishing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Publishing 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 Samsung Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Publishing has no effect on the direction of Kukdong Oil i.e., Kukdong Oil and Samsung Publishing go up and down completely randomly.
Pair Corralation between Kukdong Oil and Samsung Publishing
Assuming the 90 days trading horizon Kukdong Oil Chemicals is expected to generate 0.88 times more return on investment than Samsung Publishing. However, Kukdong Oil Chemicals is 1.13 times less risky than Samsung Publishing. It trades about 0.02 of its potential returns per unit of risk. Samsung Publishing Co is currently generating about -0.02 per unit of risk. If you would invest 346,299 in Kukdong Oil Chemicals on August 31, 2024 and sell it today you would earn a total of 11,701 from holding Kukdong Oil Chemicals or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdong Oil Chemicals vs. Samsung Publishing Co
Performance |
| Timeline |
| Kukdong Oil Chemicals |
| Samsung Publishing |
Kukdong Oil and Samsung Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdong Oil and Samsung Publishing
The main advantage of trading using opposite Kukdong Oil and Samsung Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdong Oil position performs unexpectedly, Samsung Publishing 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 Samsung Publishing will offset losses from the drop in Samsung Publishing's long position.| Kukdong Oil vs. AptaBio Therapeutics | Kukdong Oil vs. Daewoo SBI SPAC | Kukdong Oil vs. Dream Security co | Kukdong Oil vs. Microfriend |
| Samsung Publishing vs. AptaBio Therapeutics | Samsung Publishing vs. Daewoo SBI SPAC | Samsung Publishing vs. Dream Security co | Samsung Publishing vs. Microfriend |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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