Correlation Between Samsung SDI and Assems
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and Assems 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 Assems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI and Assems Inc, you can compare the effects of market volatilities on Samsung SDI and Assems 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 Assems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and Assems.
Diversification Opportunities for Samsung SDI and Assems
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and Assems is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI and Assems Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assems Inc 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 Assems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assems Inc has no effect on the direction of Samsung SDI i.e., Samsung SDI and Assems go up and down completely randomly.
Pair Corralation between Samsung SDI and Assems
Assuming the 90 days trading horizon Samsung SDI is expected to under-perform the Assems. In addition to that, Samsung SDI is 1.61 times more volatile than Assems Inc. It trades about -0.17 of its total potential returns per unit of risk. Assems Inc is currently generating about -0.01 per unit of volatility. If you would invest 694,000 in Assems Inc on September 2, 2024 and sell it today you would lose (14,000) from holding Assems Inc or give up 2.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung SDI vs. Assems Inc
Performance |
| Timeline |
| Samsung SDI |
| Assems Inc |
Samsung SDI and Assems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and Assems
The main advantage of trading using opposite Samsung SDI and Assems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, Assems 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 Assems will offset losses from the drop in Assems' long position.| Samsung SDI vs. Iljin Display | Samsung SDI vs. Aprogen Healthcare Games | Samsung SDI vs. Clean Science co | Samsung SDI vs. Nable Communications |
| Assems vs. Samsung Electronics Co | Assems vs. Samsung Electronics Co | Assems vs. LG Energy Solution | Assems 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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