Correlation Between Samick Musical and Cheryong Industrial
Can any of the company-specific risk be diversified away by investing in both Samick Musical and Cheryong Industrial 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 Cheryong Industrial 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 Cheryong Industrial CoLtd, you can compare the effects of market volatilities on Samick Musical and Cheryong Industrial 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 Cheryong Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and Cheryong Industrial.
Diversification Opportunities for Samick Musical and Cheryong Industrial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samick and Cheryong is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments and Cheryong Industrial CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheryong Industrial CoLtd 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 Cheryong Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheryong Industrial CoLtd has no effect on the direction of Samick Musical i.e., Samick Musical and Cheryong Industrial go up and down completely randomly.
Pair Corralation between Samick Musical and Cheryong Industrial
Assuming the 90 days trading horizon Samick Musical Instruments is expected to generate 0.77 times more return on investment than Cheryong Industrial. However, Samick Musical Instruments is 1.31 times less risky than Cheryong Industrial. It trades about -0.07 of its potential returns per unit of risk. Cheryong Industrial CoLtd is currently generating about -0.15 per unit of risk. If you would invest 121,600 in Samick Musical Instruments on December 8, 2024 and sell it today you would lose (5,400) from holding Samick Musical Instruments or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samick Musical Instruments vs. Cheryong Industrial CoLtd
Performance |
| Timeline |
| Samick Musical Instr |
| Cheryong Industrial CoLtd |
Samick Musical and Cheryong Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samick Musical and Cheryong Industrial
The main advantage of trading using opposite Samick Musical and Cheryong Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical position performs unexpectedly, Cheryong Industrial 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 Cheryong Industrial will offset losses from the drop in Cheryong Industrial's long position.| Samick Musical vs. Daejung Chemicals Metals | Samick Musical vs. Visang Education | Samick Musical vs. LB Investment | Samick Musical vs. Miwon Chemicals Co |
| Cheryong Industrial vs. Korea Investment Holdings | Cheryong Industrial vs. Eugene Investment Securities | Cheryong Industrial vs. Woori Financial Group | Cheryong Industrial vs. BNK Financial Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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