Correlation Between Samsung Electronics and Daehan Synthetic
Can any of the company-specific risk be diversified away by investing in both Samsung Electronics and Daehan Synthetic 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 Samsung Electronics and Daehan Synthetic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Electronics Co and Daehan Synthetic Fiber, you can compare the effects of market volatilities on Samsung Electronics and Daehan Synthetic 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 Samsung Electronics with a short position of Daehan Synthetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Electronics and Daehan Synthetic.
Diversification Opportunities for Samsung Electronics and Daehan Synthetic
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Daehan is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Electronics Co and Daehan Synthetic Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daehan Synthetic Fiber and Samsung 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 Samsung Electronics Co are associated (or correlated) with Daehan Synthetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daehan Synthetic Fiber has no effect on the direction of Samsung Electronics i.e., Samsung Electronics and Daehan Synthetic go up and down completely randomly.
Pair Corralation between Samsung Electronics and Daehan Synthetic
Assuming the 90 days trading horizon Samsung Electronics Co is expected to generate 3.8 times more return on investment than Daehan Synthetic. However, Samsung Electronics is 3.8 times more volatile than Daehan Synthetic Fiber. It trades about -0.02 of its potential returns per unit of risk. Daehan Synthetic Fiber is currently generating about -0.21 per unit of risk. If you would invest 4,600,000 in Samsung Electronics Co on September 12, 2024 and sell it today you would lose (80,000) from holding Samsung Electronics Co or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Electronics Co vs. Daehan Synthetic Fiber
Performance |
| Timeline |
| Samsung Electronics |
| Daehan Synthetic Fiber |
Samsung Electronics and Daehan Synthetic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Electronics and Daehan Synthetic
The main advantage of trading using opposite Samsung Electronics and Daehan Synthetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Electronics position performs unexpectedly, Daehan Synthetic 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 Daehan Synthetic will offset losses from the drop in Daehan Synthetic's long position.| Samsung Electronics vs. LG Corp | Samsung Electronics vs. Solution Advanced Technology | Samsung Electronics vs. Busan Industrial Co | Samsung Electronics vs. Busan Ind |
| Daehan Synthetic vs. Samsung Electronics Co | Daehan Synthetic vs. Samsung Electronics Co | Daehan Synthetic vs. SK Hynix | Daehan Synthetic vs. POSCO Holdings |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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