Correlation Between Samsung SDI and CKH Food
Can any of the company-specific risk be diversified away by investing in both Samsung SDI and CKH Food 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 CKH Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung SDI and CKH Food Health, you can compare the effects of market volatilities on Samsung SDI and CKH Food 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 CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung SDI and CKH Food.
Diversification Opportunities for Samsung SDI and CKH Food
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and CKH is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Samsung SDI and CKH Food Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKH Food Health 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 CKH Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKH Food Health has no effect on the direction of Samsung SDI i.e., Samsung SDI and CKH Food go up and down completely randomly.
Pair Corralation between Samsung SDI and CKH Food
Assuming the 90 days trading horizon Samsung SDI is expected to under-perform the CKH Food. In addition to that, Samsung SDI is 1.92 times more volatile than CKH Food Health. It trades about -0.31 of its total potential returns per unit of risk. CKH Food Health is currently generating about -0.31 per unit of volatility. If you would invest 8,000 in CKH Food Health on September 2, 2024 and sell it today you would lose (1,000.00) from holding CKH Food Health or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung SDI vs. CKH Food Health
Performance |
| Timeline |
| Samsung SDI |
| CKH Food Health |
Samsung SDI and CKH Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung SDI and CKH Food
The main advantage of trading using opposite Samsung SDI and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung SDI position performs unexpectedly, CKH Food 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 CKH Food will offset losses from the drop in CKH Food'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 |
| CKH Food vs. Korea Real Estate | CKH Food vs. Korea Ratings Co | CKH Food vs. IQuest Co | CKH Food vs. Wonbang Tech 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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