Correlation Between Wonil Special and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both Wonil Special 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 Wonil Special and Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wonil Special Steel and Samsung SDI, you can compare the effects of market volatilities on Wonil Special 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 Wonil Special with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wonil Special and Samsung SDI.
Diversification Opportunities for Wonil Special and Samsung SDI
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wonil and Samsung is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wonil Special Steel and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI and Wonil Special 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 Wonil Special Steel 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 Wonil Special i.e., Wonil Special and Samsung SDI go up and down completely randomly.
Pair Corralation between Wonil Special and Samsung SDI
Assuming the 90 days trading horizon Wonil Special Steel is expected to generate 0.24 times more return on investment than Samsung SDI. However, Wonil Special Steel is 4.24 times less risky than Samsung SDI. It trades about -0.04 of its potential returns per unit of risk. Samsung SDI is currently generating about -0.36 per unit of risk. If you would invest 727,000 in Wonil Special Steel on November 6, 2024 and sell it today you would lose (3,000) from holding Wonil Special Steel or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Wonil Special Steel vs. Samsung SDI
Performance |
| Timeline |
| Wonil Special Steel |
| Samsung SDI |
Wonil Special and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wonil Special and Samsung SDI
The main advantage of trading using opposite Wonil Special and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wonil Special 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.| Wonil Special vs. Ssangyong Information Communication | Wonil Special vs. DONGKUK TED METAL | Wonil Special vs. Youngsin Metal Industrial | Wonil Special vs. Hanjoo Light Metal |
| Samsung SDI vs. Chorokbaem Healthcare Co | Samsung SDI vs. LG Household Healthcare | Samsung SDI vs. Insung Information Co | Samsung SDI vs. BGF Retail 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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