Correlation Between Samsung SDI and Ilji Technology
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and Ilji Technology 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 Ilji Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI and Ilji Technology Co, you can compare the effects of market volatilities on Samsung SDI and Ilji Technology 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 Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and Ilji Technology.
Diversification Opportunities for Samsung SDI and Ilji Technology
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and Ilji is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI and Ilji Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilji Technology 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 Ilji Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilji Technology has no effect on the direction of Samsung SDI i.e., Samsung SDI and Ilji Technology go up and down completely randomly.
Pair Corralation between Samsung SDI and Ilji Technology
Assuming the 90 days trading horizon Samsung SDI is expected to under-perform the Ilji Technology. In addition to that, Samsung SDI is 1.01 times more volatile than Ilji Technology Co. It trades about -0.09 of its total potential returns per unit of risk. Ilji Technology Co is currently generating about 0.0 per unit of volatility. If you would invest 419,000 in Ilji Technology Co on September 1, 2024 and sell it today you would lose (41,000) from holding Ilji Technology Co or give up 9.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung SDI vs. Ilji Technology Co
Performance |
| Timeline |
| Samsung SDI |
| Ilji Technology |
Samsung SDI and Ilji Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and Ilji Technology
The main advantage of trading using opposite Samsung SDI and Ilji Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, Ilji Technology 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 Ilji Technology will offset losses from the drop in Ilji Technology'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 |
| Ilji Technology vs. LG Display | Ilji Technology vs. Hyundai Motor | Ilji Technology vs. Hyundai Motor Co | Ilji Technology vs. Hyundai Motor 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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