Correlation Between Samsung KODEX and Poongsan
Can any of the company-specific risk be diversified away by investing in both Samsung KODEX and Poongsan 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 Poongsan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung KODEX IT and Poongsan, you can compare the effects of market volatilities on Samsung KODEX and Poongsan 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 Poongsan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung KODEX and Poongsan.
Diversification Opportunities for Samsung KODEX and Poongsan
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Poongsan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Samsung KODEX IT and Poongsan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poongsan 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 IT are associated (or correlated) with Poongsan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poongsan has no effect on the direction of Samsung KODEX i.e., Samsung KODEX and Poongsan go up and down completely randomly.
Pair Corralation between Samsung KODEX and Poongsan
Assuming the 90 days trading horizon Samsung KODEX IT is expected to generate 0.48 times more return on investment than Poongsan. However, Samsung KODEX IT is 2.08 times less risky than Poongsan. It trades about -0.1 of its potential returns per unit of risk. Poongsan is currently generating about -0.09 per unit of risk. If you would invest 1,546,500 in Samsung KODEX IT on September 25, 2024 and sell it today you would lose (61,500) from holding Samsung KODEX IT or give up 3.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung KODEX IT vs. Poongsan
Performance |
| Timeline |
| Samsung KODEX IT |
| Poongsan |
Samsung KODEX and Poongsan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung KODEX and Poongsan
The main advantage of trading using opposite Samsung KODEX and Poongsan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung KODEX position performs unexpectedly, Poongsan 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 Poongsan will offset losses from the drop in Poongsan's long position.| Samsung KODEX vs. 456680 | Samsung KODEX vs. Busan Industrial Co | Samsung KODEX vs. Busan Ind | Samsung KODEX vs. Mirae Asset Daewoo |
| Poongsan vs. LG Chemicals | Poongsan vs. POSCO Holdings | Poongsan vs. Hanwha Solutions | Poongsan vs. Lotte Chemical Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |