Correlation Between Samsung KODEX and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Samsung KODEX and Dow Jones 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 Samsung KODEX and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung KODEX Machinary and Dow Jones Industrial, you can compare the effects of market volatilities on Samsung KODEX and Dow Jones 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 Samsung KODEX with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung KODEX and Dow Jones.
Diversification Opportunities for Samsung KODEX and Dow Jones
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Dow is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Samsung KODEX Machinary and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Samsung KODEX 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 Samsung KODEX Machinary are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Samsung KODEX i.e., Samsung KODEX and Dow Jones go up and down completely randomly.
Pair Corralation between Samsung KODEX and Dow Jones
Assuming the 90 days trading horizon Samsung KODEX Machinary is expected to generate 2.59 times more return on investment than Dow Jones. However, Samsung KODEX is 2.59 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 532,896 in Samsung KODEX Machinary on September 2, 2024 and sell it today you would earn a total of 165,104 from holding Samsung KODEX Machinary or generate 30.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.58% |
| Values | Daily Returns |
Samsung KODEX Machinary vs. Dow Jones Industrial
Performance |
| Timeline |
Samsung KODEX and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Samsung KODEX Machinary
Pair trading matchups for Samsung KODEX
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Samsung KODEX and Dow Jones
The main advantage of trading using opposite Samsung KODEX and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung KODEX position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Samsung KODEX vs. Busan Industrial Co | Samsung KODEX vs. Busan Ind | Samsung KODEX vs. Mirae Asset Daewoo | Samsung KODEX vs. Shinhan WTI Futures |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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