Correlation Between Samick Musical and Daedong Metals
Can any of the company-specific risk be diversified away by investing in both Samick Musical and Daedong Metals 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 Samick Musical and Daedong Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samick Musical Instruments and Daedong Metals Co, you can compare the effects of market volatilities on Samick Musical and Daedong Metals 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 Samick Musical with a short position of Daedong Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and Daedong Metals.
Diversification Opportunities for Samick Musical and Daedong Metals
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Samick and Daedong is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments and Daedong Metals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daedong Metals and Samick Musical 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 Samick Musical Instruments are associated (or correlated) with Daedong Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daedong Metals has no effect on the direction of Samick Musical i.e., Samick Musical and Daedong Metals go up and down completely randomly.
Pair Corralation between Samick Musical and Daedong Metals
Assuming the 90 days trading horizon Samick Musical Instruments is expected to under-perform the Daedong Metals. But the stock apears to be less risky and, when comparing its historical volatility, Samick Musical Instruments is 3.39 times less risky than Daedong Metals. The stock trades about -0.01 of its potential returns per unit of risk. The Daedong Metals Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 938,756 in Daedong Metals Co on September 3, 2024 and sell it today you would lose (196,756) from holding Daedong Metals Co or give up 20.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samick Musical Instruments vs. Daedong Metals Co
Performance |
| Timeline |
| Samick Musical Instr |
| Daedong Metals |
Samick Musical and Daedong Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samick Musical and Daedong Metals
The main advantage of trading using opposite Samick Musical and Daedong Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical position performs unexpectedly, Daedong Metals 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 Daedong Metals will offset losses from the drop in Daedong Metals' long position.| Samick Musical vs. AptaBio Therapeutics | Samick Musical vs. Daewoo SBI SPAC | Samick Musical vs. Dream Security co | Samick Musical vs. Microfriend |
| Daedong Metals vs. Ecocab Co | Daedong Metals vs. Daedong Gear Co | Daedong Metals vs. Hwashin Precision Engineering | Daedong Metals vs. YOUNGHWA TECH 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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