Correlation Between Samwha Electronics and Dongwoo Farm
Can any of the company-specific risk be diversified away by investing in both Samwha Electronics and Dongwoo Farm 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 Samwha Electronics and Dongwoo Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samwha Electronics Co and Dongwoo Farm To, you can compare the effects of market volatilities on Samwha Electronics and Dongwoo Farm 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 Samwha Electronics with a short position of Dongwoo Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samwha Electronics and Dongwoo Farm.
Diversification Opportunities for Samwha Electronics and Dongwoo Farm
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Samwha and Dongwoo is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Samwha Electronics Co and Dongwoo Farm To in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoo Farm To and Samwha Electronics 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 Samwha Electronics Co are associated (or correlated) with Dongwoo Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoo Farm To has no effect on the direction of Samwha Electronics i.e., Samwha Electronics and Dongwoo Farm go up and down completely randomly.
Pair Corralation between Samwha Electronics and Dongwoo Farm
Assuming the 90 days trading horizon Samwha Electronics Co is expected to generate 4.06 times more return on investment than Dongwoo Farm. However, Samwha Electronics is 4.06 times more volatile than Dongwoo Farm To. It trades about 0.05 of its potential returns per unit of risk. Dongwoo Farm To is currently generating about 0.0 per unit of risk. If you would invest 321,500 in Samwha Electronics Co on October 14, 2024 and sell it today you would earn a total of 31,000 from holding Samwha Electronics Co or generate 9.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samwha Electronics Co vs. Dongwoo Farm To
Performance |
| Timeline |
| Samwha Electronics |
| Dongwoo Farm To |
Samwha Electronics and Dongwoo Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samwha Electronics and Dongwoo Farm
The main advantage of trading using opposite Samwha Electronics and Dongwoo Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samwha Electronics position performs unexpectedly, Dongwoo Farm 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 Dongwoo Farm will offset losses from the drop in Dongwoo Farm's long position.| Samwha Electronics vs. KEPCO Engineering Construction | Samwha Electronics vs. Dongkuk Structures Construction | Samwha Electronics vs. Cuckoo Electronics Co | Samwha Electronics vs. Hannong Chemicals |
| Dongwoo Farm vs. Daewoo Electronic Components | Dongwoo Farm vs. DC Media Co | Dongwoo Farm vs. Samwha Electronics Co | Dongwoo Farm vs. Wave Electronics 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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