Correlation Between Samyoung Electronics and Digital Multimedia
Can any of the company-specific risk be diversified away by investing in both Samyoung Electronics and Digital Multimedia 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 Samyoung Electronics and Digital Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samyoung Electronics Co and Digital Multimedia Technology, you can compare the effects of market volatilities on Samyoung Electronics and Digital Multimedia 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 Samyoung Electronics with a short position of Digital Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samyoung Electronics and Digital Multimedia.
Diversification Opportunities for Samyoung Electronics and Digital Multimedia
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Samyoung and Digital is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Samyoung Electronics Co and Digital Multimedia Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Multimedia and Samyoung Electronics 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 Samyoung Electronics Co are associated (or correlated) with Digital Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Multimedia has no effect on the direction of Samyoung Electronics i.e., Samyoung Electronics and Digital Multimedia go up and down completely randomly.
Pair Corralation between Samyoung Electronics and Digital Multimedia
Assuming the 90 days trading horizon Samyoung Electronics is expected to generate 1.28 times less return on investment than Digital Multimedia. But when comparing it to its historical volatility, Samyoung Electronics Co is 4.61 times less risky than Digital Multimedia. It trades about 0.26 of its potential returns per unit of risk. Digital Multimedia Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 186,500 in Digital Multimedia Technology on November 1, 2024 and sell it today you would earn a total of 7,800 from holding Digital Multimedia Technology or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samyoung Electronics Co vs. Digital Multimedia Technology
Performance |
| Timeline |
| Samyoung Electronics |
| Digital Multimedia |
Samyoung Electronics and Digital Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samyoung Electronics and Digital Multimedia
The main advantage of trading using opposite Samyoung Electronics and Digital Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samyoung Electronics position performs unexpectedly, Digital Multimedia 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 Digital Multimedia will offset losses from the drop in Digital Multimedia's long position.| Samyoung Electronics vs. Daejung Chemicals Metals | Samyoung Electronics vs. Daesung Industrial Co | Samyoung Electronics vs. Seoyon Topmetal Co | Samyoung Electronics vs. LEENO Industrial |
| Digital Multimedia vs. UJU Electronics Co | Digital Multimedia vs. ABCO Electronics Co | Digital Multimedia vs. Korea Electronic Certification | Digital Multimedia vs. Samyoung Electronics Co |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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