Correlation Between Samick Musical and System
Can any of the company-specific risk be diversified away by investing in both Samick Musical and System 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 System 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 System and Application, you can compare the effects of market volatilities on Samick Musical and System 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 System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and System.
Diversification Opportunities for Samick Musical and System
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samick and System is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments and System and Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System and Application 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 System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System and Application has no effect on the direction of Samick Musical i.e., Samick Musical and System go up and down completely randomly.
Pair Corralation between Samick Musical and System
Assuming the 90 days trading horizon Samick Musical Instruments is expected to generate 0.5 times more return on investment than System. However, Samick Musical Instruments is 1.99 times less risky than System. It trades about 0.04 of its potential returns per unit of risk. System and Application is currently generating about -0.01 per unit of risk. If you would invest 121,760 in Samick Musical Instruments on October 27, 2024 and sell it today you would earn a total of 28,340 from holding Samick Musical Instruments or generate 23.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samick Musical Instruments vs. System and Application
Performance |
| Timeline |
| Samick Musical Instr |
| System and Application |
Samick Musical and System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samick Musical and System
The main advantage of trading using opposite Samick Musical and System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical position performs unexpectedly, System 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 System will offset losses from the drop in System's long position.| Samick Musical vs. LG Chemicals | Samick Musical vs. Shinhan Inverse Copper | Samick Musical vs. Seoyon Topmetal Co | Samick Musical vs. Heungkuk Metaltech CoLtd |
| System vs. Sejong Telecom | System vs. Nable Communications | System vs. PJ Metal Co | System vs. Nice Information Telecommunication |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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