Correlation Between Daishin Information and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both Daishin Information 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 Daishin Information and Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Information Communications and Samsung SDI, you can compare the effects of market volatilities on Daishin Information 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 Daishin Information with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Information and Samsung SDI.
Diversification Opportunities for Daishin Information and Samsung SDI
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daishin and Samsung is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Information Communicat and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI and Daishin Information 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 Daishin Information Communications 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 Daishin Information i.e., Daishin Information and Samsung SDI go up and down completely randomly.
Pair Corralation between Daishin Information and Samsung SDI
Assuming the 90 days trading horizon Daishin Information Communications is expected to generate 0.48 times more return on investment than Samsung SDI. However, Daishin Information Communications is 2.06 times less risky than Samsung SDI. It trades about -0.02 of its potential returns per unit of risk. Samsung SDI is currently generating about -0.28 per unit of risk. If you would invest 86,900 in Daishin Information Communications on August 29, 2024 and sell it today you would lose (1,000.00) from holding Daishin Information Communications or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Information Communicat vs. Samsung SDI
Performance |
| Timeline |
| Daishin Information |
| Samsung SDI |
Daishin Information and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Information and Samsung SDI
The main advantage of trading using opposite Daishin Information and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Information 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.| Daishin Information vs. LB Investment | Daishin Information vs. DSC Investment | Daishin Information vs. Coloray International Investment | Daishin Information vs. Hanwha InvestmentSecurities Co |
| Samsung SDI vs. Korea Real Estate | Samsung SDI vs. Korea Ratings Co | Samsung SDI vs. IQuest Co | Samsung SDI vs. Wonbang Tech 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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