Correlation Between Daewoo Electronic and Samwha Electronics
Can any of the company-specific risk be diversified away by investing in both Daewoo Electronic and Samwha Electronics 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 Daewoo Electronic and Samwha Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo Electronic Components and Samwha Electronics Co, you can compare the effects of market volatilities on Daewoo Electronic and Samwha Electronics 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 Daewoo Electronic with a short position of Samwha Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo Electronic and Samwha Electronics.
Diversification Opportunities for Daewoo Electronic and Samwha Electronics
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daewoo and Samwha is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo Electronic Components and Samwha Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samwha Electronics and Daewoo Electronic 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 Daewoo Electronic Components are associated (or correlated) with Samwha Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samwha Electronics has no effect on the direction of Daewoo Electronic i.e., Daewoo Electronic and Samwha Electronics go up and down completely randomly.
Pair Corralation between Daewoo Electronic and Samwha Electronics
Assuming the 90 days trading horizon Daewoo Electronic Components is expected to under-perform the Samwha Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Daewoo Electronic Components is 2.41 times less risky than Samwha Electronics. The stock trades about -0.02 of its potential returns per unit of risk. The Samwha Electronics Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 270,501 in Samwha Electronics Co on October 14, 2024 and sell it today you would earn a total of 81,999 from holding Samwha Electronics Co or generate 30.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Daewoo Electronic Components vs. Samwha Electronics Co
Performance |
| Timeline |
| Daewoo Electronic |
| Samwha Electronics |
Daewoo Electronic and Samwha Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo Electronic and Samwha Electronics
The main advantage of trading using opposite Daewoo Electronic and Samwha Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo Electronic position performs unexpectedly, Samwha Electronics 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 Samwha Electronics will offset losses from the drop in Samwha Electronics' long position.| Daewoo Electronic vs. Daesung Hi Tech Co | Daewoo Electronic vs. LG Display Co | Daewoo Electronic vs. Lotte Data Communication | Daewoo Electronic vs. Digital Power Communications |
| Samwha Electronics vs. Daewoo Electronic Components | Samwha Electronics vs. Shinil Electronics Co | Samwha Electronics vs. Nable Communications | Samwha Electronics vs. Seoul Electronics Telecom |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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