Correlation Between Korea Information and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Korea Information 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 Information 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 Information Engineering and Samsung Electronics Co, you can compare the effects of market volatilities on Korea Information 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 Information with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Samsung Electronics.
Diversification Opportunities for Korea Information and Samsung Electronics
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Korea and Samsung is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering 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 Information 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 Information Engineering 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 Information i.e., Korea Information and Samsung Electronics go up and down completely randomly.
Pair Corralation between Korea Information and Samsung Electronics
Assuming the 90 days trading horizon Korea Information Engineering is expected to generate 1.14 times more return on investment than Samsung Electronics. However, Korea Information is 1.14 times more volatile than Samsung Electronics Co. It trades about 0.05 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.17 per unit of risk. If you would invest 255,000 in Korea Information Engineering on November 7, 2024 and sell it today you would earn a total of 3,000 from holding Korea Information Engineering or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Korea Information Engineering vs. Samsung Electronics Co
Performance |
| Timeline |
| Korea Information |
| Samsung Electronics |
Korea Information and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Samsung Electronics
The main advantage of trading using opposite Korea Information and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information 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 Information vs. Jeju Bank | Korea Information vs. PNC Technologies co | Korea Information vs. Polaris Office Corp | Korea Information vs. PH Tech Co |
| Samsung Electronics vs. SK Chemicals Co | Samsung Electronics vs. LAKE MATERIALS LTD | Samsung Electronics vs. TK Chemical | Samsung Electronics vs. SAMG Entertainment 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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