Correlation Between Samick Musical and Coloray International
Can any of the company-specific risk be diversified away by investing in both Samick Musical and Coloray International 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 Coloray International 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 Coloray International Investment, you can compare the effects of market volatilities on Samick Musical and Coloray International 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 Coloray International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samick Musical and Coloray International.
Diversification Opportunities for Samick Musical and Coloray International
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samick and Coloray is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Samick Musical Instruments and Coloray International Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloray International 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 Coloray International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloray International has no effect on the direction of Samick Musical i.e., Samick Musical and Coloray International go up and down completely randomly.
Pair Corralation between Samick Musical and Coloray International
Assuming the 90 days trading horizon Samick Musical Instruments is expected to under-perform the Coloray International. But the stock apears to be less risky and, when comparing its historical volatility, Samick Musical Instruments is 1.14 times less risky than Coloray International. The stock trades about -0.15 of its potential returns per unit of risk. The Coloray International Investment is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 76,700 in Coloray International Investment on November 29, 2024 and sell it today you would earn a total of 9,800 from holding Coloray International Investment or generate 12.78% 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. Coloray International Investme
Performance |
| Timeline |
| Samick Musical Instr |
| Coloray International |
Samick Musical and Coloray International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samick Musical and Coloray International
The main advantage of trading using opposite Samick Musical and Coloray International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samick Musical position performs unexpectedly, Coloray International 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 Coloray International will offset losses from the drop in Coloray International's long position.| Samick Musical vs. Keyang Electric Machinery | Samick Musical vs. Sungdo Engineering Construction | Samick Musical vs. LG Display Co | Samick Musical vs. Dongwoo Farm To |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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