Correlation Between Atinum Investment and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both Atinum Investment 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 Atinum Investment and Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atinum Investment Co and Samsung SDI, you can compare the effects of market volatilities on Atinum Investment 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 Atinum Investment with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atinum Investment and Samsung SDI.
Diversification Opportunities for Atinum Investment and Samsung SDI
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Atinum and Samsung is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Atinum Investment Co and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI and Atinum Investment 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 Atinum Investment 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 Atinum Investment i.e., Atinum Investment and Samsung SDI go up and down completely randomly.
Pair Corralation between Atinum Investment and Samsung SDI
Assuming the 90 days trading horizon Atinum Investment Co is expected to generate 0.75 times more return on investment than Samsung SDI. However, Atinum Investment Co is 1.33 times less risky than Samsung SDI. It trades about -0.13 of its potential returns per unit of risk. Samsung SDI is currently generating about -0.29 per unit of risk. If you would invest 257,500 in Atinum Investment Co on September 1, 2024 and sell it today you would lose (22,000) from holding Atinum Investment Co or give up 8.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atinum Investment Co vs. Samsung SDI
Performance |
| Timeline |
| Atinum Investment |
| Samsung SDI |
Atinum Investment and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atinum Investment and Samsung SDI
The main advantage of trading using opposite Atinum Investment and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atinum Investment 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.The idea behind Atinum Investment Co and Samsung SDI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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