Correlation Between Samick Musical and Formetal
Can any of the company-specific risk be diversified away by investing in both Samick Musical and Formetal 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 Formetal 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 Formetal Co, you can compare the effects of market volatilities on Samick Musical and Formetal 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 Formetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and Formetal.
Diversification Opportunities for Samick Musical and Formetal
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samick and Formetal is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments and Formetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formetal 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 Formetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formetal has no effect on the direction of Samick Musical i.e., Samick Musical and Formetal go up and down completely randomly.
Pair Corralation between Samick Musical and Formetal
Assuming the 90 days trading horizon Samick Musical is expected to generate 1.1 times less return on investment than Formetal. But when comparing it to its historical volatility, Samick Musical Instruments is 2.5 times less risky than Formetal. It trades about 0.19 of its potential returns per unit of risk. Formetal Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 277,000 in Formetal Co on September 21, 2024 and sell it today you would earn a total of 19,500 from holding Formetal Co or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samick Musical Instruments vs. Formetal Co
Performance |
| Timeline |
| Samick Musical Instr |
| Formetal |
Samick Musical and Formetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samick Musical and Formetal
The main advantage of trading using opposite Samick Musical and Formetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical position performs unexpectedly, Formetal 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 Formetal will offset losses from the drop in Formetal's long position.| Samick Musical vs. Foodnamoo | Samick Musical vs. Sempio Foods Co | Samick Musical vs. Hyundai Green Food | Samick Musical vs. Korea Information Communications |
| Formetal vs. Rainbow Robotics | Formetal vs. COWINTECH Co | Formetal vs. CS BEARING CoLtd | Formetal vs. Young Poong Precision |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |