Correlation Between Samsung Life and Kia Corp
Can any of the company-specific risk be diversified away by investing in both Samsung Life and Kia Corp 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 Life and Kia Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Life and Kia Corp, you can compare the effects of market volatilities on Samsung Life and Kia Corp 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 Life with a short position of Kia Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Life and Kia Corp.
Diversification Opportunities for Samsung Life and Kia Corp
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Kia is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Life and Kia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kia Corp and Samsung Life 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 Life are associated (or correlated) with Kia Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kia Corp has no effect on the direction of Samsung Life i.e., Samsung Life and Kia Corp go up and down completely randomly.
Pair Corralation between Samsung Life and Kia Corp
Assuming the 90 days trading horizon Samsung Life is expected to under-perform the Kia Corp. In addition to that, Samsung Life is 1.98 times more volatile than Kia Corp. It trades about -0.06 of its total potential returns per unit of risk. Kia Corp is currently generating about 0.07 per unit of volatility. If you would invest 10,050,000 in Kia Corp on November 5, 2024 and sell it today you would earn a total of 150,000 from holding Kia Corp or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Life vs. Kia Corp
Performance |
| Timeline |
| Samsung Life |
| Kia Corp |
Samsung Life and Kia Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Life and Kia Corp
The main advantage of trading using opposite Samsung Life and Kia Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Life position performs unexpectedly, Kia Corp 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 Kia Corp will offset losses from the drop in Kia Corp's long position.| Samsung Life vs. Kaonmedia Co | Samsung Life vs. SKONEC Entertainment Co | Samsung Life vs. Lotte Rental Co | Samsung Life vs. Aprogen Healthcare Games |
| Kia Corp vs. Kolon Plastics | Kia Corp vs. Solution Advanced Technology | Kia Corp vs. HB Technology TD | Kia Corp vs. Guyoung Technology 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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