Correlation Between Samsung Card and KCC Engineering
Can any of the company-specific risk be diversified away by investing in both Samsung Card and KCC Engineering 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 Samsung Card and KCC Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Card Co and KCC Engineering Construction, you can compare the effects of market volatilities on Samsung Card and KCC Engineering 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 Samsung Card with a short position of KCC Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Card and KCC Engineering.
Diversification Opportunities for Samsung Card and KCC Engineering
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and KCC is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Card Co and KCC Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCC Engineering Cons and Samsung Card 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 Samsung Card Co are associated (or correlated) with KCC Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCC Engineering Cons has no effect on the direction of Samsung Card i.e., Samsung Card and KCC Engineering go up and down completely randomly.
Pair Corralation between Samsung Card and KCC Engineering
Assuming the 90 days trading horizon Samsung Card Co is expected to generate 1.75 times more return on investment than KCC Engineering. However, Samsung Card is 1.75 times more volatile than KCC Engineering Construction. It trades about 0.33 of its potential returns per unit of risk. KCC Engineering Construction is currently generating about -0.31 per unit of risk. If you would invest 3,910,000 in Samsung Card Co on November 3, 2024 and sell it today you would earn a total of 290,000 from holding Samsung Card Co or generate 7.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Card Co vs. KCC Engineering Construction
Performance |
| Timeline |
| Samsung Card |
| KCC Engineering Cons |
Samsung Card and KCC Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Card and KCC Engineering
The main advantage of trading using opposite Samsung Card and KCC Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Card position performs unexpectedly, KCC Engineering 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 KCC Engineering will offset losses from the drop in KCC Engineering's long position.| Samsung Card vs. GS Engineering Construction | Samsung Card vs. Korea Computer | Samsung Card vs. Nam Hwa Construction | Samsung Card vs. Daishin Information Communications |
| KCC Engineering vs. Samsung Card Co | KCC Engineering vs. EBEST Investment Securities | KCC Engineering vs. Koh Young Technology | KCC Engineering vs. Hansol Chemica |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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