Correlation Between Korea Ratings and Samji Electronics
Can any of the company-specific risk be diversified away by investing in both Korea Ratings and Samji 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 Ratings and Samji Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Ratings Co and Samji Electronics Co, you can compare the effects of market volatilities on Korea Ratings and Samji 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 Ratings with a short position of Samji Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Ratings and Samji Electronics.
Diversification Opportunities for Korea Ratings and Samji Electronics
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and Samji is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Korea Ratings Co and Samji Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samji Electronics and Korea Ratings 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 Ratings Co are associated (or correlated) with Samji Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samji Electronics has no effect on the direction of Korea Ratings i.e., Korea Ratings and Samji Electronics go up and down completely randomly.
Pair Corralation between Korea Ratings and Samji Electronics
Assuming the 90 days trading horizon Korea Ratings Co is expected to generate 0.65 times more return on investment than Samji Electronics. However, Korea Ratings Co is 1.54 times less risky than Samji Electronics. It trades about 0.12 of its potential returns per unit of risk. Samji Electronics Co is currently generating about -0.04 per unit of risk. If you would invest 8,510,000 in Korea Ratings Co on August 29, 2024 and sell it today you would earn a total of 370,000 from holding Korea Ratings Co or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Ratings Co vs. Samji Electronics Co
Performance |
| Timeline |
| Korea Ratings |
| Samji Electronics |
Korea Ratings and Samji Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Ratings and Samji Electronics
The main advantage of trading using opposite Korea Ratings and Samji Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Ratings position performs unexpectedly, Samji 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 Samji Electronics will offset losses from the drop in Samji Electronics' long position.| Korea Ratings vs. Kukdo Chemical Co | Korea Ratings vs. Daehan Synthetic Fiber | Korea Ratings vs. Youngbo Chemical Co | Korea Ratings vs. LG Electronics Pfd |
| Samji Electronics vs. Daou Data Corp | Samji Electronics vs. Busan Industrial Co | Samji Electronics vs. Busan Ind | Samji Electronics vs. Shinhan WTI Futures |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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