Correlation Between Samsung SDI and CC International
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and CC International 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 CC International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI and CC International Corp, you can compare the effects of market volatilities on Samsung SDI and CC International 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 CC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and CC International.
Diversification Opportunities for Samsung SDI and CC International
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Samsung and 352480 is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI and CC International Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CC International Corp 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 CC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CC International Corp has no effect on the direction of Samsung SDI i.e., Samsung SDI and CC International go up and down completely randomly.
Pair Corralation between Samsung SDI and CC International
Assuming the 90 days trading horizon Samsung SDI is expected to generate 0.67 times more return on investment than CC International. However, Samsung SDI is 1.5 times less risky than CC International. It trades about -0.23 of its potential returns per unit of risk. CC International Corp is currently generating about -0.39 per unit of risk. If you would invest 37,850,000 in Samsung SDI on August 29, 2024 and sell it today you would lose (10,000,000) from holding Samsung SDI or give up 26.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung SDI vs. CC International Corp
Performance |
| Timeline |
| Samsung SDI |
| CC International Corp |
Samsung SDI and CC International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and CC International
The main advantage of trading using opposite Samsung SDI and CC International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, CC International 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 CC International will offset losses from the drop in CC International's long position.| Samsung SDI vs. Atinum Investment Co | Samsung SDI vs. GS Retail Co | Samsung SDI vs. Sungdo Engineering Construction | Samsung SDI vs. DSC Investment |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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