Correlation Between Korea Environment and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Korea Environment 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 Korea Environment and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Environment Technology and Samsung Electronics Co, you can compare the effects of market volatilities on Korea Environment 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 Korea Environment with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Environment and Samsung Electronics.
Diversification Opportunities for Korea Environment and Samsung Electronics
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korea and Samsung is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Korea Environment Technology and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Korea Environment 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 Environment Technology 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 Korea Environment i.e., Korea Environment and Samsung Electronics go up and down completely randomly.
Pair Corralation between Korea Environment and Samsung Electronics
Assuming the 90 days trading horizon Korea Environment Technology is expected to generate 0.72 times more return on investment than Samsung Electronics. However, Korea Environment Technology is 1.39 times less risky than Samsung Electronics. It trades about 0.07 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.01 per unit of risk. If you would invest 616,191 in Korea Environment Technology on October 29, 2024 and sell it today you would earn a total of 271,809 from holding Korea Environment Technology or generate 44.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Korea Environment Technology vs. Samsung Electronics Co
Performance |
Timeline |
Korea Environment |
Samsung Electronics |
Korea Environment and Samsung Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Korea Environment and Samsung Electronics
The main advantage of trading using opposite Korea Environment and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Environment 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.Korea Environment vs. INSUN Environmental New | Korea Environment vs. LEENO Industrial | Korea Environment vs. Kmw Inc | Korea Environment vs. NICE Information Service |
Samsung Electronics vs. DONGKUK STEEL MILL | Samsung Electronics vs. System and Application | Samsung Electronics vs. GS Retail Co | Samsung Electronics vs. SeAH Besteel Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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