Correlation Between Samsung SDI and Aurora World
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and Aurora World 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 Aurora World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI and Aurora World, you can compare the effects of market volatilities on Samsung SDI and Aurora World 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 Aurora World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and Aurora World.
Diversification Opportunities for Samsung SDI and Aurora World
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and Aurora is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI and Aurora World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora World 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 Aurora World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora World has no effect on the direction of Samsung SDI i.e., Samsung SDI and Aurora World go up and down completely randomly.
Pair Corralation between Samsung SDI and Aurora World
Assuming the 90 days trading horizon Samsung SDI is expected to under-perform the Aurora World. In addition to that, Samsung SDI is 2.03 times more volatile than Aurora World. It trades about -0.07 of its total potential returns per unit of risk. Aurora World is currently generating about -0.02 per unit of volatility. If you would invest 763,511 in Aurora World on November 2, 2024 and sell it today you would lose (115,511) from holding Aurora World or give up 15.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung SDI vs. Aurora World
Performance |
| Timeline |
| Samsung SDI |
| Aurora World |
Samsung SDI and Aurora World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and Aurora World
The main advantage of trading using opposite Samsung SDI and Aurora World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, Aurora World 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 Aurora World will offset losses from the drop in Aurora World's long position.| Samsung SDI vs. LG Display Co | Samsung SDI vs. Inzi Display CoLtd | Samsung SDI vs. ITM Semiconductor Co | Samsung SDI vs. Daishin Information Communications |
| Aurora World vs. RF Materials Co | Aurora World vs. Display Tech Co | Aurora World vs. INNOX Advanced Materials | Aurora World vs. PLAYWITH |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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