Correlation Between Samsung SDI and DAEMO Engineering
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and DAEMO Engineering 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 DAEMO Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI and DAEMO Engineering Co, you can compare the effects of market volatilities on Samsung SDI and DAEMO Engineering 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 DAEMO Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and DAEMO Engineering.
Diversification Opportunities for Samsung SDI and DAEMO Engineering
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Samsung and DAEMO is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI and DAEMO Engineering Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAEMO Engineering 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 DAEMO Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAEMO Engineering has no effect on the direction of Samsung SDI i.e., Samsung SDI and DAEMO Engineering go up and down completely randomly.
Pair Corralation between Samsung SDI and DAEMO Engineering
Assuming the 90 days trading horizon Samsung SDI is expected to under-perform the DAEMO Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Samsung SDI is 1.41 times less risky than DAEMO Engineering. The stock trades about -0.29 of its potential returns per unit of risk. The DAEMO Engineering Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 977,000 in DAEMO Engineering Co on September 1, 2024 and sell it today you would lose (37,000) from holding DAEMO Engineering Co or give up 3.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Samsung SDI vs. DAEMO Engineering Co
Performance |
| Timeline |
| Samsung SDI |
| DAEMO Engineering |
Samsung SDI and DAEMO Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and DAEMO Engineering
The main advantage of trading using opposite Samsung SDI and DAEMO Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, DAEMO Engineering 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 DAEMO Engineering will offset losses from the drop in DAEMO Engineering'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 |
| DAEMO Engineering vs. COWINTECH Co | DAEMO Engineering vs. Young Poong Precision | DAEMO Engineering vs. Seoam Machinery Industry | DAEMO Engineering vs. Haisung TPC Co |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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