Correlation Between Korea Investment and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Korea Investment 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 Investment 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 Investment Holdings and Samsung Electronics Co, you can compare the effects of market volatilities on Korea Investment 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 Investment with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Investment and Samsung Electronics.
Diversification Opportunities for Korea Investment and Samsung Electronics
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Korea and Samsung is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Korea Investment Holdings 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 Investment 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 Investment Holdings 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 Investment i.e., Korea Investment and Samsung Electronics go up and down completely randomly.
Pair Corralation between Korea Investment and Samsung Electronics
Assuming the 90 days trading horizon Korea Investment Holdings is expected to generate 0.87 times more return on investment than Samsung Electronics. However, Korea Investment Holdings is 1.15 times less risky than Samsung Electronics. It trades about 0.06 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.01 per unit of risk. If you would invest 3,704,504 in Korea Investment Holdings on December 4, 2024 and sell it today you would earn a total of 1,775,496 from holding Korea Investment Holdings or generate 47.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Korea Investment Holdings vs. Samsung Electronics Co
Performance |
| Timeline |
| Korea Investment Holdings |
| Samsung Electronics |
Korea Investment and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Investment and Samsung Electronics
The main advantage of trading using opposite Korea Investment and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Investment 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 Investment vs. NH Investment Securities | Korea Investment vs. SBI Investment KOREA | Korea Investment vs. Playgram Co | Korea Investment vs. DB Financial Investment |
| Samsung Electronics vs. Kisan Telecom Co | Samsung Electronics vs. Daishin Information Communications | Samsung Electronics vs. SK Telecom Co | Samsung Electronics vs. Hyundai Engineering Plastics |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |