Correlation Between Samil CoLtd and Daedong Metals
Can any of the company-specific risk be diversified away by investing in both Samil CoLtd and Daedong Metals 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 Samil CoLtd and Daedong Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samil CoLtd and Daedong Metals Co, you can compare the effects of market volatilities on Samil CoLtd and Daedong Metals 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 Samil CoLtd with a short position of Daedong Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samil CoLtd and Daedong Metals.
Diversification Opportunities for Samil CoLtd and Daedong Metals
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samil and Daedong is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Samil CoLtd and Daedong Metals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daedong Metals and Samil CoLtd 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 Samil CoLtd are associated (or correlated) with Daedong Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daedong Metals has no effect on the direction of Samil CoLtd i.e., Samil CoLtd and Daedong Metals go up and down completely randomly.
Pair Corralation between Samil CoLtd and Daedong Metals
Assuming the 90 days trading horizon Samil CoLtd is expected to generate 2.43 times less return on investment than Daedong Metals. But when comparing it to its historical volatility, Samil CoLtd is 5.15 times less risky than Daedong Metals. It trades about 0.3 of its potential returns per unit of risk. Daedong Metals Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 616,000 in Daedong Metals Co on September 2, 2024 and sell it today you would earn a total of 126,000 from holding Daedong Metals Co or generate 20.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samil CoLtd vs. Daedong Metals Co
Performance |
| Timeline |
| Samil CoLtd |
| Daedong Metals |
Samil CoLtd and Daedong Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samil CoLtd and Daedong Metals
The main advantage of trading using opposite Samil CoLtd and Daedong Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samil CoLtd position performs unexpectedly, Daedong Metals 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 Daedong Metals will offset losses from the drop in Daedong Metals' long position.| Samil CoLtd vs. Daedong Metals Co | Samil CoLtd vs. MetaLabs Co | Samil CoLtd vs. Hanjoo Light Metal | Samil CoLtd vs. SM Entertainment 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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