Correlation Between Samsung SDI and YG Entertainment
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and YG Entertainment 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 YG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI and YG Entertainment, you can compare the effects of market volatilities on Samsung SDI and YG Entertainment 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 YG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and YG Entertainment.
Diversification Opportunities for Samsung SDI and YG Entertainment
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Samsung and 122870 is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI and YG Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YG Entertainment 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 YG Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YG Entertainment has no effect on the direction of Samsung SDI i.e., Samsung SDI and YG Entertainment go up and down completely randomly.
Pair Corralation between Samsung SDI and YG Entertainment
Assuming the 90 days trading horizon Samsung SDI is expected to under-perform the YG Entertainment. In addition to that, Samsung SDI is 1.22 times more volatile than YG Entertainment. It trades about -0.07 of its total potential returns per unit of risk. YG Entertainment is currently generating about 0.05 per unit of volatility. If you would invest 4,285,000 in YG Entertainment on August 28, 2024 and sell it today you would earn a total of 475,000 from holding YG Entertainment or generate 11.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung SDI vs. YG Entertainment
Performance |
| Timeline |
| Samsung SDI |
| YG Entertainment |
Samsung SDI and YG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and YG Entertainment
The main advantage of trading using opposite Samsung SDI and YG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, YG Entertainment 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 YG Entertainment will offset losses from the drop in YG Entertainment's long position.| Samsung SDI vs. Korea Real Estate | Samsung SDI vs. Korea Ratings Co | Samsung SDI vs. IQuest Co | Samsung SDI vs. Wonbang Tech Co |
| YG Entertainment vs. Samsung Electronics Co | YG Entertainment vs. Samsung Electronics Co | YG Entertainment vs. LG Energy Solution | YG Entertainment 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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