Correlation Between Samsung Asset and Samsung KODEX
Can any of the company-specific risk be diversified away by investing in both Samsung Asset and Samsung KODEX 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 Asset and Samsung KODEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Asset Management and Samsung KODEX Machinary, you can compare the effects of market volatilities on Samsung Asset and Samsung KODEX 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 Asset with a short position of Samsung KODEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Asset and Samsung KODEX.
Diversification Opportunities for Samsung Asset and Samsung KODEX
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samsung and Samsung is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Asset Management and Samsung KODEX Machinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung KODEX Machinary and Samsung Asset 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 Asset Management are associated (or correlated) with Samsung KODEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung KODEX Machinary has no effect on the direction of Samsung Asset i.e., Samsung Asset and Samsung KODEX go up and down completely randomly.
Pair Corralation between Samsung Asset and Samsung KODEX
Assuming the 90 days trading horizon Samsung Asset Management is expected to generate 0.29 times more return on investment than Samsung KODEX. However, Samsung Asset Management is 3.42 times less risky than Samsung KODEX. It trades about 0.09 of its potential returns per unit of risk. Samsung KODEX Machinary is currently generating about -0.19 per unit of risk. If you would invest 1,665,000 in Samsung Asset Management on September 12, 2024 and sell it today you would earn a total of 20,500 from holding Samsung Asset Management or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Asset Management vs. Samsung KODEX Machinary
Performance |
| Timeline |
| Samsung Asset Management |
| Samsung KODEX Machinary |
Samsung Asset and Samsung KODEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Asset and Samsung KODEX
The main advantage of trading using opposite Samsung Asset and Samsung KODEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Asset position performs unexpectedly, Samsung KODEX 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 KODEX will offset losses from the drop in Samsung KODEX's long position.| Samsung Asset vs. Busan Industrial Co | Samsung Asset vs. Busan Ind | Samsung Asset vs. Shinhan WTI Futures | Samsung Asset vs. UNISEM Co |
| Samsung KODEX vs. Busan Industrial Co | Samsung KODEX vs. Busan Ind | Samsung KODEX vs. Shinhan WTI Futures | Samsung KODEX vs. UNISEM 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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