Correlation Between ECSTELECOM and Samsung Securities
Can any of the company-specific risk be diversified away by investing in both ECSTELECOM and Samsung Securities 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 ECSTELECOM and Samsung Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECSTELECOM Co and Samsung Securities, you can compare the effects of market volatilities on ECSTELECOM and Samsung Securities 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 ECSTELECOM with a short position of Samsung Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECSTELECOM and Samsung Securities.
Diversification Opportunities for ECSTELECOM and Samsung Securities
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ECSTELECOM and Samsung is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding ECSTELECOM Co and Samsung Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Securities and ECSTELECOM 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 ECSTELECOM Co are associated (or correlated) with Samsung Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Securities has no effect on the direction of ECSTELECOM i.e., ECSTELECOM and Samsung Securities go up and down completely randomly.
Pair Corralation between ECSTELECOM and Samsung Securities
Assuming the 90 days trading horizon ECSTELECOM Co is expected to under-perform the Samsung Securities. In addition to that, ECSTELECOM is 1.27 times more volatile than Samsung Securities. It trades about -0.06 of its total potential returns per unit of risk. Samsung Securities is currently generating about 0.27 per unit of volatility. If you would invest 4,305,000 in Samsung Securities on November 3, 2024 and sell it today you would earn a total of 255,000 from holding Samsung Securities or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
ECSTELECOM Co vs. Samsung Securities
Performance |
| Timeline |
| ECSTELECOM |
| Samsung Securities |
ECSTELECOM and Samsung Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECSTELECOM and Samsung Securities
The main advantage of trading using opposite ECSTELECOM and Samsung Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECSTELECOM position performs unexpectedly, Samsung Securities 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 Securities will offset losses from the drop in Samsung Securities' long position.| ECSTELECOM vs. Daiyang Metal Co | ECSTELECOM vs. Daishin Information Communications | ECSTELECOM vs. Lotte Data Communication | ECSTELECOM vs. Hyunwoo Industrial Co |
| Samsung Securities vs. Kukdong Oil Chemicals | Samsung Securities vs. Solus Advanced Materials | Samsung Securities vs. National Plastic Co | Samsung Securities vs. INNOX Advanced Materials |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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