Correlation Between Kolon Plastics and Samsung Publishing
Can any of the company-specific risk be diversified away by investing in both Kolon Plastics and Samsung Publishing 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 Kolon Plastics and Samsung Publishing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Plastics and Samsung Publishing Co, you can compare the effects of market volatilities on Kolon Plastics and Samsung Publishing 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 Kolon Plastics with a short position of Samsung Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Plastics and Samsung Publishing.
Diversification Opportunities for Kolon Plastics and Samsung Publishing
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kolon and Samsung is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Plastics and Samsung Publishing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Publishing and Kolon Plastics 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 Kolon Plastics are associated (or correlated) with Samsung Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Publishing has no effect on the direction of Kolon Plastics i.e., Kolon Plastics and Samsung Publishing go up and down completely randomly.
Pair Corralation between Kolon Plastics and Samsung Publishing
Assuming the 90 days trading horizon Kolon Plastics is expected to generate 0.75 times more return on investment than Samsung Publishing. However, Kolon Plastics is 1.34 times less risky than Samsung Publishing. It trades about 0.12 of its potential returns per unit of risk. Samsung Publishing Co is currently generating about 0.07 per unit of risk. If you would invest 527,000 in Kolon Plastics on October 30, 2024 and sell it today you would earn a total of 15,000 from holding Kolon Plastics or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kolon Plastics vs. Samsung Publishing Co
Performance |
| Timeline |
| Kolon Plastics |
| Samsung Publishing |
Kolon Plastics and Samsung Publishing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolon Plastics and Samsung Publishing
The main advantage of trading using opposite Kolon Plastics and Samsung Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Plastics position performs unexpectedly, Samsung Publishing 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 Publishing will offset losses from the drop in Samsung Publishing's long position.| Kolon Plastics vs. Bosung Power Technology | Kolon Plastics vs. Dong A Steel Technology | Kolon Plastics vs. NewFlex Technology Co | Kolon Plastics vs. iNtRON Biotechnology |
| Samsung Publishing vs. LG Household Healthcare | Samsung Publishing vs. Clean Science co | Samsung Publishing vs. Mgame Corp | Samsung Publishing vs. Hotel Shilla 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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