Correlation Between Daedong Metals and Samji Electronics
Can any of the company-specific risk be diversified away by investing in both Daedong Metals and Samji 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 Daedong Metals and Samji Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daedong Metals Co and Samji Electronics Co, you can compare the effects of market volatilities on Daedong Metals and Samji 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 Daedong Metals with a short position of Samji Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daedong Metals and Samji Electronics.
Diversification Opportunities for Daedong Metals and Samji Electronics
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daedong and Samji is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Daedong Metals Co and Samji Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samji Electronics and Daedong Metals 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 Daedong Metals Co are associated (or correlated) with Samji Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samji Electronics has no effect on the direction of Daedong Metals i.e., Daedong Metals and Samji Electronics go up and down completely randomly.
Pair Corralation between Daedong Metals and Samji Electronics
Assuming the 90 days trading horizon Daedong Metals is expected to generate 1.64 times less return on investment than Samji Electronics. In addition to that, Daedong Metals is 2.64 times more volatile than Samji Electronics Co. It trades about 0.0 of its total potential returns per unit of risk. Samji Electronics Co is currently generating about 0.01 per unit of volatility. If you would invest 810,180 in Samji Electronics Co on September 3, 2024 and sell it today you would earn a total of 27,820 from holding Samji Electronics Co or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daedong Metals Co vs. Samji Electronics Co
Performance |
| Timeline |
| Daedong Metals |
| Samji Electronics |
Daedong Metals and Samji Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daedong Metals and Samji Electronics
The main advantage of trading using opposite Daedong Metals and Samji Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daedong Metals position performs unexpectedly, Samji 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 Samji Electronics will offset losses from the drop in Samji Electronics' long position.| Daedong Metals vs. Ecocab Co | Daedong Metals vs. Daedong Gear Co | Daedong Metals vs. Hwashin Precision Engineering | Daedong Metals vs. YOUNGHWA TECH Co |
| Samji Electronics vs. Dongsin Engineering Construction | Samji Electronics vs. Doosan Fuel Cell | Samji Electronics vs. Daishin Balance 1 | Samji Electronics vs. Total Soft Bank |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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