Correlation Between KTB Investment and Samsung Electronics

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

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

Diversification Opportunities for KTB Investment and Samsung Electronics

0.88

Correlation Coefficient

KTB Investment  Samsung Electronics

Very poor diversification

The 3 months correlation between KTB and Samsung is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and KTB Investment 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 KTB Investment Securities 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 KTB Investment i.e., KTB Investment and Samsung Electronics go up and down completely randomly.

Pair Corralation between KTB Investment and Samsung Electronics

Assuming the 90 days trading horizon KTB Investment Securities is expected to under-perform the Samsung Electronics. In addition to that, KTB Investment is 1.01 times more volatile than Samsung Electronics Co. It trades about -0.09 of its total potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.03 per unit of volatility. If you would invest  5,614,821  in Samsung Electronics Co on September 14, 2024 and sell it today you would lose (954,821) from holding Samsung Electronics Co or give up 17.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.62%
Values	Daily Returns

KTB Investment Securities  vs.  Samsung Electronics Co

KTB Investment Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KTB Investment Securities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Samsung Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsung Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with KTB Investment and Samsung Electronics

The main advantage of trading using opposite KTB Investment and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTB Investment 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 KTB Investment Securities 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.