Correlation Between Samsung KODEX and 456680

Can any of the company-specific risk be diversified away by investing in both Samsung KODEX and 456680 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 456680 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 456680, you can compare the effects of market volatilities on Samsung KODEX and 456680 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 456680. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung KODEX and 456680.

Diversification Opportunities for Samsung KODEX and 456680

-0.47

Correlation Coefficient

Samsung KODEX  456680

Very good diversification

The 3 months correlation between Samsung and 456680 is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Samsung KODEX IT and 456680 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 456680 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 456680. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 456680 has no effect on the direction of Samsung KODEX i.e., Samsung KODEX and 456680 go up and down completely randomly.

Pair Corralation between Samsung KODEX and 456680

Assuming the 90 days trading horizon Samsung KODEX IT is expected to under-perform the 456680. But the etf apears to be less risky and, when comparing its historical volatility, Samsung KODEX IT is 2.95 times less risky than 456680. The etf trades about -0.14 of its potential returns per unit of risk. The 456680 is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  343,000  in 456680 on September 23, 2024 and sell it today you would earn a total of  265,500  from holding 456680 or generate 77.41% return on investment over 90 days.

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

Samsung KODEX IT  vs.  456680

Samsung KODEX IT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samsung KODEX IT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf'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 ETF investors.

456680

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 456680 are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 456680 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samsung KODEX and 456680

The main advantage of trading using opposite Samsung KODEX and 456680 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung KODEX position performs unexpectedly, 456680 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 456680 will offset losses from the drop in 456680's long position.

The idea behind Samsung KODEX IT and 456680 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.