Correlation Between SungMoon Electronics and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both SungMoon Electronics 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 SungMoon Electronics and Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SungMoon Electronics Co and Samsung SDI, you can compare the effects of market volatilities on SungMoon Electronics 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 SungMoon Electronics with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of SungMoon Electronics and Samsung SDI.
Diversification Opportunities for SungMoon Electronics and Samsung SDI
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SungMoon and Samsung is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding SungMoon Electronics Co and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI and SungMoon 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 SungMoon Electronics 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 SungMoon Electronics i.e., SungMoon Electronics and Samsung SDI go up and down completely randomly.
Pair Corralation between SungMoon Electronics and Samsung SDI
Assuming the 90 days trading horizon SungMoon Electronics Co is expected to generate 0.74 times more return on investment than Samsung SDI. However, SungMoon Electronics Co is 1.36 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 -0.2 per unit of risk. If you would invest 113,300 in SungMoon Electronics Co on October 14, 2024 and sell it today you would earn a total of 7,200 from holding SungMoon Electronics Co or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SungMoon Electronics Co vs. Samsung SDI
Performance |
| Timeline |
| SungMoon Electronics |
| Samsung SDI |
SungMoon Electronics and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SungMoon Electronics and Samsung SDI
The main advantage of trading using opposite SungMoon Electronics and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SungMoon Electronics 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.| SungMoon Electronics vs. Kukdong Oil Chemicals | SungMoon Electronics vs. PJ Metal Co | SungMoon Electronics vs. SS TECH | SungMoon Electronics vs. PH Tech Co |
| Samsung SDI vs. SungMoon Electronics Co | Samsung SDI vs. Anam Electronics Co | Samsung SDI vs. Woori Technology | Samsung SDI vs. Hwangkum Steel Technology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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