Correlation Between Songwon Industrial and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both Songwon Industrial and Samsung SDI 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 Songwon Industrial and Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Songwon Industrial Co and Samsung SDI, you can compare the effects of market volatilities on Songwon Industrial and Samsung SDI 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 Songwon Industrial with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songwon Industrial and Samsung SDI.
Diversification Opportunities for Songwon Industrial and Samsung SDI
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Songwon and Samsung is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Songwon Industrial Co and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI and Songwon Industrial 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 Songwon Industrial Co are associated (or correlated) with Samsung SDI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung SDI has no effect on the direction of Songwon Industrial i.e., Songwon Industrial and Samsung SDI go up and down completely randomly.
Pair Corralation between Songwon Industrial and Samsung SDI
Assuming the 90 days trading horizon Songwon Industrial Co is expected to generate 0.9 times more return on investment than Samsung SDI. However, Songwon Industrial Co is 1.11 times less risky than Samsung SDI. It trades about 0.22 of its potential returns per unit of risk. Samsung SDI is currently generating about -0.36 per unit of risk. If you would invest 1,136,000 in Songwon Industrial Co on November 7, 2024 and sell it today you would earn a total of 104,000 from holding Songwon Industrial Co or generate 9.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Songwon Industrial Co vs. Samsung SDI
Performance |
| Timeline |
| Songwon Industrial |
| Samsung SDI |
Songwon Industrial and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songwon Industrial and Samsung SDI
The main advantage of trading using opposite Songwon Industrial and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songwon Industrial position performs unexpectedly, Samsung SDI 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 Samsung SDI will offset losses from the drop in Samsung SDI's long position.| Songwon Industrial vs. Genie Music | Songwon Industrial vs. Cuckoo Electronics Co | Songwon Industrial vs. Seoul Electronics Telecom | Songwon Industrial vs. FNC Entertainment Co |
| Samsung SDI vs. SK IE Technology | Samsung SDI vs. Seoul Semiconductor Co | Samsung SDI vs. Cots Technology Co | Samsung SDI vs. Choil Aluminum |
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 CEOs Directory module to screen CEOs from public companies around the world.
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