Correlation Between Tae Kwang and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Tae Kwang and Samsung Electronics 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 Tae Kwang and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tae Kwang and Samsung Electronics Co, you can compare the effects of market volatilities on Tae Kwang and Samsung Electronics 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 Tae Kwang with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kwang and Samsung Electronics.
Diversification Opportunities for Tae Kwang and Samsung Electronics
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tae and Samsung is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kwang and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Tae Kwang 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 Tae Kwang are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Tae Kwang i.e., Tae Kwang and Samsung Electronics go up and down completely randomly.
Pair Corralation between Tae Kwang and Samsung Electronics
Assuming the 90 days trading horizon Tae Kwang is expected to generate 1.67 times more return on investment than Samsung Electronics. However, Tae Kwang is 1.67 times more volatile than Samsung Electronics Co. It trades about 0.11 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.09 per unit of risk. If you would invest 2,220,000 in Tae Kwang on December 1, 2024 and sell it today you would earn a total of 160,000 from holding Tae Kwang or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tae Kwang vs. Samsung Electronics Co
Performance |
| Timeline |
| Tae Kwang |
| Samsung Electronics |
Tae Kwang and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kwang and Samsung Electronics
The main advantage of trading using opposite Tae Kwang and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kwang position performs unexpectedly, Samsung Electronics 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 Electronics will offset losses from the drop in Samsung Electronics' long position.| Tae Kwang vs. Sung Kwang Bend | Tae Kwang vs. Taewoong CoLtd | Tae Kwang vs. SFA Engineering | Tae Kwang vs. Soulbrain Holdings Co |
| Samsung Electronics vs. GAMEVIL | Samsung Electronics vs. Shinhan Inverse Silver | Samsung Electronics vs. Seoul Food Industrial | Samsung Electronics vs. Sempio Foods 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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