Correlation Between Samsung SDI and FarmStory
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and FarmStory 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 FarmStory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI and FarmStory Co, you can compare the effects of market volatilities on Samsung SDI and FarmStory 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 FarmStory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and FarmStory.
Diversification Opportunities for Samsung SDI and FarmStory
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and FarmStory is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI and FarmStory Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FarmStory 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 FarmStory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FarmStory has no effect on the direction of Samsung SDI i.e., Samsung SDI and FarmStory go up and down completely randomly.
Pair Corralation between Samsung SDI and FarmStory
Assuming the 90 days trading horizon Samsung SDI is expected to under-perform the FarmStory. In addition to that, Samsung SDI is 1.14 times more volatile than FarmStory Co. It trades about -0.06 of its total potential returns per unit of risk. FarmStory Co is currently generating about -0.03 per unit of volatility. If you would invest 185,275 in FarmStory Co on September 3, 2024 and sell it today you would lose (69,275) from holding FarmStory Co or give up 37.39% 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. FarmStory Co
Performance |
| Timeline |
| Samsung SDI |
| FarmStory |
Samsung SDI and FarmStory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and FarmStory
The main advantage of trading using opposite Samsung SDI and FarmStory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, FarmStory 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 FarmStory will offset losses from the drop in FarmStory's long position.| Samsung SDI vs. Wave Electronics Co | Samsung SDI vs. Haitai Confectionery Foods | Samsung SDI vs. Sangshin Electronics Co | Samsung SDI vs. Shinil Electronics Co |
| FarmStory vs. Hwangkum Steel Technology | FarmStory vs. KMH Hitech Co | FarmStory vs. Daiyang Metal Co | FarmStory vs. Raontech |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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