Correlation Between KEPCO Engineering and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both KEPCO Engineering 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 KEPCO Engineering and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KEPCO Engineering Construction and Samsung Electronics Co, you can compare the effects of market volatilities on KEPCO Engineering 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 KEPCO Engineering with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEPCO Engineering and Samsung Electronics.
Diversification Opportunities for KEPCO Engineering and Samsung Electronics
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KEPCO and Samsung is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding KEPCO Engineering Construction and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and KEPCO Engineering 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 KEPCO Engineering Construction 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 KEPCO Engineering i.e., KEPCO Engineering and Samsung Electronics go up and down completely randomly.
Pair Corralation between KEPCO Engineering and Samsung Electronics
Assuming the 90 days trading horizon KEPCO Engineering Construction is expected to generate 0.89 times more return on investment than Samsung Electronics. However, KEPCO Engineering Construction is 1.13 times less risky than Samsung Electronics. It trades about 0.95 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.25 per unit of risk. If you would invest 5,610,000 in KEPCO Engineering Construction on November 5, 2024 and sell it today you would earn a total of 1,280,000 from holding KEPCO Engineering Construction or generate 22.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KEPCO Engineering Construction vs. Samsung Electronics Co
Performance |
| Timeline |
| KEPCO Engineering |
| Samsung Electronics |
KEPCO Engineering and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KEPCO Engineering and Samsung Electronics
The main advantage of trading using opposite KEPCO Engineering and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEPCO Engineering 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.| KEPCO Engineering vs. Samsung CT Corp | KEPCO Engineering vs. Hyundai Engineering Construction | KEPCO Engineering vs. Camus Engineering Construction |
| Samsung Electronics vs. Cloud Air CoLtd | Samsung Electronics vs. Jeju Beer Co | Samsung Electronics vs. Air Busan Co | Samsung Electronics vs. Jeju Air 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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