Correlation Between Korea Alcohol and Samsung Publishing
Can any of the company-specific risk be diversified away by investing in both Korea Alcohol 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 Korea Alcohol and Samsung Publishing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Alcohol Industrial and Samsung Publishing Co, you can compare the effects of market volatilities on Korea Alcohol 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 Korea Alcohol with a short position of Samsung Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Alcohol and Samsung Publishing.
Diversification Opportunities for Korea Alcohol and Samsung Publishing
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and Samsung is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Korea Alcohol Industrial and Samsung Publishing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Publishing and Korea Alcohol 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 Korea Alcohol Industrial 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 Korea Alcohol i.e., Korea Alcohol and Samsung Publishing go up and down completely randomly.
Pair Corralation between Korea Alcohol and Samsung Publishing
Assuming the 90 days trading horizon Korea Alcohol Industrial is expected to generate 0.45 times more return on investment than Samsung Publishing. However, Korea Alcohol Industrial is 2.24 times less risky than Samsung Publishing. It trades about -0.04 of its potential returns per unit of risk. Samsung Publishing Co is currently generating about -0.05 per unit of risk. If you would invest 899,337 in Korea Alcohol Industrial on October 14, 2024 and sell it today you would lose (35,337) from holding Korea Alcohol Industrial or give up 3.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Alcohol Industrial vs. Samsung Publishing Co
Performance |
| Timeline |
| Korea Alcohol Industrial |
| Samsung Publishing |
Korea Alcohol and Samsung Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Alcohol and Samsung Publishing
The main advantage of trading using opposite Korea Alcohol and Samsung Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Alcohol 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.| Korea Alcohol vs. J Steel Co | Korea Alcohol vs. Hankuk Steel Wire | Korea Alcohol vs. ECSTELECOM Co | Korea Alcohol vs. Daehan Steel |
| Samsung Publishing vs. Lotte Non Life Insurance | Samsung Publishing vs. Korea Alcohol Industrial | Samsung Publishing vs. Sam Yang Foods | Samsung Publishing vs. Sungmoon Electronics 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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