Correlation Between Samsung SDI and Nongshim
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and Nongshim 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 SDI and Nongshim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI and Nongshim, you can compare the effects of market volatilities on Samsung SDI and Nongshim 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 SDI with a short position of Nongshim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and Nongshim.
Diversification Opportunities for Samsung SDI and Nongshim
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Nongshim is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI and Nongshim in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nongshim and Samsung SDI 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 SDI are associated (or correlated) with Nongshim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nongshim has no effect on the direction of Samsung SDI i.e., Samsung SDI and Nongshim go up and down completely randomly.
Pair Corralation between Samsung SDI and Nongshim
Assuming the 90 days trading horizon Samsung SDI is expected to under-perform the Nongshim. In addition to that, Samsung SDI is 1.3 times more volatile than Nongshim. It trades about -0.09 of its total potential returns per unit of risk. Nongshim is currently generating about -0.02 per unit of volatility. If you would invest 44,104,800 in Nongshim on September 1, 2024 and sell it today you would lose (9,704,800) from holding Nongshim or give up 22.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Samsung SDI vs. Nongshim
Performance |
| Timeline |
| Samsung SDI |
| Nongshim |
Samsung SDI and Nongshim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and Nongshim
The main advantage of trading using opposite Samsung SDI and Nongshim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, Nongshim 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 Nongshim will offset losses from the drop in Nongshim's long position.| Samsung SDI vs. Dongsin Engineering Construction | Samsung SDI vs. Doosan Fuel Cell | Samsung SDI vs. Daishin Balance 1 | Samsung SDI vs. Total Soft Bank |
| Nongshim vs. ENERGYMACHINERY KOREA CoLtd | Nongshim vs. Mobileleader CoLtd | Nongshim vs. KEPCO Engineering Construction | Nongshim vs. Seohee Construction 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |