Correlation Between Samsung SDI and Cosmax
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and Cosmax 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 Cosmax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI and Cosmax Inc, you can compare the effects of market volatilities on Samsung SDI and Cosmax 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 Cosmax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and Cosmax.
Diversification Opportunities for Samsung SDI and Cosmax
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Samsung and Cosmax is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI and Cosmax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmax 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 Cosmax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmax Inc has no effect on the direction of Samsung SDI i.e., Samsung SDI and Cosmax go up and down completely randomly.
Pair Corralation between Samsung SDI and Cosmax
Assuming the 90 days trading horizon Samsung SDI is expected to under-perform the Cosmax. But the stock apears to be less risky and, when comparing its historical volatility, Samsung SDI is 1.12 times less risky than Cosmax. The stock trades about -0.06 of its potential returns per unit of risk. The Cosmax Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,701,785 in Cosmax Inc on September 2, 2024 and sell it today you would earn a total of 6,598,215 from holding Cosmax Inc or generate 98.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung SDI vs. Cosmax Inc
Performance |
| Timeline |
| Samsung SDI |
| Cosmax Inc |
Samsung SDI and Cosmax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and Cosmax
The main advantage of trading using opposite Samsung SDI and Cosmax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, Cosmax 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 Cosmax will offset losses from the drop in Cosmax's long position.| Samsung SDI vs. Iljin Display | Samsung SDI vs. Aprogen Healthcare Games | Samsung SDI vs. Clean Science co | Samsung SDI vs. Nable Communications |
| Cosmax vs. E Investment Development | Cosmax vs. Cuckoo Electronics Co | Cosmax vs. Daeduck Electronics Co | Cosmax vs. Daol Investment Securities |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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