Correlation Between Samsung Fire and Daejoo
Can any of the company-specific risk be diversified away by investing in both Samsung Fire and Daejoo 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 Fire and Daejoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Fire Marine and Daejoo Inc, you can compare the effects of market volatilities on Samsung Fire and Daejoo 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 Fire with a short position of Daejoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Fire and Daejoo.
Diversification Opportunities for Samsung Fire and Daejoo
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Daejoo is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Fire Marine and Daejoo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejoo Inc and Samsung Fire 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 Fire Marine are associated (or correlated) with Daejoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejoo Inc has no effect on the direction of Samsung Fire i.e., Samsung Fire and Daejoo go up and down completely randomly.
Pair Corralation between Samsung Fire and Daejoo
Assuming the 90 days trading horizon Samsung Fire Marine is expected to generate 1.55 times more return on investment than Daejoo. However, Samsung Fire is 1.55 times more volatile than Daejoo Inc. It trades about 0.03 of its potential returns per unit of risk. Daejoo Inc is currently generating about 0.03 per unit of risk. If you would invest 34,650,000 in Samsung Fire Marine on October 24, 2024 and sell it today you would earn a total of 850,000 from holding Samsung Fire Marine or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Samsung Fire Marine vs. Daejoo Inc
Performance |
| Timeline |
| Samsung Fire Marine |
| Daejoo Inc |
Samsung Fire and Daejoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Fire and Daejoo
The main advantage of trading using opposite Samsung Fire and Daejoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Fire position performs unexpectedly, Daejoo 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 Daejoo will offset losses from the drop in Daejoo's long position.| Samsung Fire vs. AeroSpace Technology of | Samsung Fire vs. Inzi Display CoLtd | Samsung Fire vs. Guyoung Technology Co | Samsung Fire vs. Digital Imaging Technology |
| Daejoo vs. Homecast CoLtd | Daejoo vs. LS Materials | Daejoo vs. Polaris Office Corp | Daejoo vs. Solus Advanced Materials |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |