Correlation Between Samsung SDI and Cube Entertainment
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and Cube 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 Cube 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 Cube Entertainment, you can compare the effects of market volatilities on Samsung SDI and Cube 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 Cube Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and Cube Entertainment.
Diversification Opportunities for Samsung SDI and Cube Entertainment
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and Cube is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI and Cube Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cube 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 Cube Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cube Entertainment has no effect on the direction of Samsung SDI i.e., Samsung SDI and Cube Entertainment go up and down completely randomly.
Pair Corralation between Samsung SDI and Cube Entertainment
Assuming the 90 days trading horizon Samsung SDI is expected to under-perform the Cube Entertainment. In addition to that, Samsung SDI is 1.28 times more volatile than Cube Entertainment. It trades about -0.29 of its total potential returns per unit of risk. Cube Entertainment is currently generating about 0.38 per unit of volatility. If you would invest 1,304,000 in Cube Entertainment on September 1, 2024 and sell it today you would earn a total of 334,000 from holding Cube Entertainment or generate 25.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung SDI vs. Cube Entertainment
Performance |
| Timeline |
| Samsung SDI |
| Cube Entertainment |
Samsung SDI and Cube Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and Cube Entertainment
The main advantage of trading using opposite Samsung SDI and Cube Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, Cube 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 Cube Entertainment will offset losses from the drop in Cube Entertainment'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 |
| Cube Entertainment vs. Samsung Electronics Co | Cube Entertainment vs. Samsung Electronics Co | Cube Entertainment vs. LG Energy Solution | Cube 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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