Correlation Between GS Retail and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both GS Retail and Samsung SDI 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 GS Retail and Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Retail Co and Samsung SDI, you can compare the effects of market volatilities on GS Retail and Samsung SDI 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 GS Retail with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Retail and Samsung SDI.
Diversification Opportunities for GS Retail and Samsung SDI
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between 007070 and Samsung is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GS Retail Co and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI and GS Retail 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 GS Retail Co are associated (or correlated) with Samsung SDI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung SDI has no effect on the direction of GS Retail i.e., GS Retail and Samsung SDI go up and down completely randomly.
Pair Corralation between GS Retail and Samsung SDI
Assuming the 90 days trading horizon GS Retail Co is expected to generate 0.51 times more return on investment than Samsung SDI. However, GS Retail Co is 1.94 times less risky than Samsung SDI. It trades about 0.18 of its potential returns per unit of risk. Samsung SDI is currently generating about -0.29 per unit of risk. If you would invest 2,160,000 in GS Retail Co on September 1, 2024 and sell it today you would earn a total of 155,000 from holding GS Retail Co or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GS Retail Co vs. Samsung SDI
Performance |
| Timeline |
| GS Retail |
| Samsung SDI |
GS Retail and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Retail and Samsung SDI
The main advantage of trading using opposite GS Retail and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Retail position performs unexpectedly, Samsung SDI 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 Samsung SDI will offset losses from the drop in Samsung SDI's long position.| GS Retail vs. AptaBio Therapeutics | GS Retail vs. Daewoo SBI SPAC | GS Retail vs. Dream Security co | GS Retail vs. Microfriend |
| Samsung SDI vs. Dongsin Engineering Construction | Samsung SDI vs. Doosan Fuel Cell | Samsung SDI vs. Daishin Balance 1 | Samsung SDI vs. Total Soft Bank |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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