Correlation Between SK Chemicals and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both SK Chemicals 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 SK Chemicals and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Chemicals Co and Samsung Electronics Co, you can compare the effects of market volatilities on SK Chemicals 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 SK Chemicals with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Chemicals and Samsung Electronics.
Diversification Opportunities for SK Chemicals and Samsung Electronics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 28513K and Samsung is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SK Chemicals Co and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and SK Chemicals 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 SK Chemicals Co 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 SK Chemicals i.e., SK Chemicals and Samsung Electronics go up and down completely randomly.
Pair Corralation between SK Chemicals and Samsung Electronics
Assuming the 90 days trading horizon SK Chemicals Co is expected to generate 1.34 times more return on investment than Samsung Electronics. However, SK Chemicals is 1.34 times more volatile than Samsung Electronics Co. It trades about 0.13 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about 0.1 per unit of risk. If you would invest 1,888,000 in SK Chemicals Co on October 11, 2024 and sell it today you would earn a total of 117,000 from holding SK Chemicals Co or generate 6.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Chemicals Co vs. Samsung Electronics Co
Performance |
| Timeline |
| SK Chemicals |
| Samsung Electronics |
SK Chemicals and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Chemicals and Samsung Electronics
The main advantage of trading using opposite SK Chemicals and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Chemicals 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.| SK Chemicals vs. Sung Bo Chemicals | SK Chemicals vs. Jeju Beer Co | SK Chemicals vs. Hankook Furniture Co | SK Chemicals vs. Asiana Airlines |
| Samsung Electronics vs. Top Material Co | Samsung Electronics vs. SH Energy Chemical | Samsung Electronics vs. PI Advanced Materials | Samsung Electronics vs. Kukdo Chemical 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |