Correlation Between Isu Chemical and Samick Musical
Can any of the company-specific risk be diversified away by investing in both Isu Chemical and Samick Musical 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 Isu Chemical and Samick Musical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Isu Chemical Co and Samick Musical Instruments, you can compare the effects of market volatilities on Isu Chemical and Samick Musical 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 Isu Chemical with a short position of Samick Musical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Isu Chemical and Samick Musical.
Diversification Opportunities for Isu Chemical and Samick Musical
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Isu and Samick is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Isu Chemical Co and Samick Musical Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samick Musical Instr and Isu Chemical 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 Isu Chemical Co are associated (or correlated) with Samick Musical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samick Musical Instr has no effect on the direction of Isu Chemical i.e., Isu Chemical and Samick Musical go up and down completely randomly.
Pair Corralation between Isu Chemical and Samick Musical
Assuming the 90 days trading horizon Isu Chemical Co is expected to under-perform the Samick Musical. But the stock apears to be less risky and, when comparing its historical volatility, Isu Chemical Co is 1.96 times less risky than Samick Musical. The stock trades about -0.03 of its potential returns per unit of risk. The Samick Musical Instruments is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 116,800 in Samick Musical Instruments on November 7, 2024 and sell it today you would earn a total of 4,800 from holding Samick Musical Instruments or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Isu Chemical Co vs. Samick Musical Instruments
Performance |
| Timeline |
| Isu Chemical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Samick Musical Instr |
Isu Chemical and Samick Musical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Isu Chemical and Samick Musical
The main advantage of trading using opposite Isu Chemical and Samick Musical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Isu Chemical position performs unexpectedly, Samick Musical 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 Samick Musical will offset losses from the drop in Samick Musical's long position.| Isu Chemical vs. Woori Technology | Isu Chemical vs. Seoul Electronics Telecom | Isu Chemical vs. Dongwoon Anatech Co | Isu Chemical vs. PNC Technologies co |
| Samick Musical vs. Korea Electronic Certification | Samick Musical vs. Woori Technology | Samick Musical vs. Eagle Veterinary Technology | Samick Musical vs. Genie Music |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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