Correlation Between Kukil Metal and Samsung Electronics

Can any of the company-specific risk be diversified away by investing in both Kukil Metal 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 Kukil Metal and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kukil Metal Co and Samsung Electronics Co, you can compare the effects of market volatilities on Kukil Metal 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 Kukil Metal with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukil Metal and Samsung Electronics.

Diversification Opportunities for Kukil Metal and Samsung Electronics

-0.09

Correlation Coefficient

Kukil Metal  Samsung Electronics

Good diversification

The 3 months correlation between Kukil and Samsung is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal 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 Kukil Metal 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 Kukil Metal 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 Kukil Metal i.e., Kukil Metal and Samsung Electronics go up and down completely randomly.

Pair Corralation between Kukil Metal and Samsung Electronics

Assuming the 90 days trading horizon Kukil Metal Co is expected to generate 1.83 times more return on investment than Samsung Electronics. However, Kukil Metal is 1.83 times more volatile than Samsung Electronics Co. It trades about 0.17 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.16 per unit of risk. If you would invest  254,500  in Kukil Metal Co on February 15, 2024 and sell it today you would earn a total of  23,000  from holding Kukil Metal Co or generate 9.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kukil Metal Co  vs.  Samsung Electronics Co

Kukil Metal

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kukil Metal Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Kukil Metal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Samsung Electronics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Electronics Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Samsung Electronics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kukil Metal and Samsung Electronics

The main advantage of trading using opposite Kukil Metal and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukil Metal 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.

The idea behind Kukil Metal Co and Samsung Electronics Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.