Correlation Between Samsung SDI and Hotel Shilla
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and Hotel Shilla 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 Hotel Shilla into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI and Hotel Shilla Co, you can compare the effects of market volatilities on Samsung SDI and Hotel Shilla 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 Hotel Shilla. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and Hotel Shilla.
Diversification Opportunities for Samsung SDI and Hotel Shilla
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Samsung and Hotel is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI and Hotel Shilla Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Shilla 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 Hotel Shilla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Shilla has no effect on the direction of Samsung SDI i.e., Samsung SDI and Hotel Shilla go up and down completely randomly.
Pair Corralation between Samsung SDI and Hotel Shilla
Assuming the 90 days trading horizon Samsung SDI is expected to under-perform the Hotel Shilla. In addition to that, Samsung SDI is 2.03 times more volatile than Hotel Shilla Co. It trades about -0.05 of its total potential returns per unit of risk. Hotel Shilla Co is currently generating about -0.11 per unit of volatility. If you would invest 6,410,000 in Hotel Shilla Co on October 10, 2024 and sell it today you would lose (3,350,000) from holding Hotel Shilla Co or give up 52.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung SDI vs. Hotel Shilla Co
Performance |
| Timeline |
| Samsung SDI |
| Hotel Shilla |
Samsung SDI and Hotel Shilla Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and Hotel Shilla
The main advantage of trading using opposite Samsung SDI and Hotel Shilla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, Hotel Shilla 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 Hotel Shilla will offset losses from the drop in Hotel Shilla's long position.| Samsung SDI vs. Jeju Semiconductor Corp | Samsung SDI vs. Korea Information Communications | Samsung SDI vs. Shinsegae Engineering Construction | Samsung SDI vs. Seoam Machinery Industry |
| Hotel Shilla vs. Samsung Electronics Co | Hotel Shilla vs. Samsung Electronics Co | Hotel Shilla vs. LG Energy Solution | Hotel Shilla vs. SK Hynix |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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