Correlation Between Samil CoLtd and Stic Investments
Can any of the company-specific risk be diversified away by investing in both Samil CoLtd and Stic Investments 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 Stic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samil CoLtd and Stic Investments, you can compare the effects of market volatilities on Samil CoLtd and Stic Investments 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 Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samil CoLtd and Stic Investments.
Diversification Opportunities for Samil CoLtd and Stic Investments
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samil and Stic is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Samil CoLtd and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments 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 Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of Samil CoLtd i.e., Samil CoLtd and Stic Investments go up and down completely randomly.
Pair Corralation between Samil CoLtd and Stic Investments
Assuming the 90 days trading horizon Samil CoLtd is expected to generate 0.65 times more return on investment than Stic Investments. However, Samil CoLtd is 1.53 times less risky than Stic Investments. It trades about 0.32 of its potential returns per unit of risk. Stic Investments is currently generating about -0.04 per unit of risk. If you would invest 147,800 in Samil CoLtd on August 27, 2024 and sell it today you would earn a total of 13,000 from holding Samil CoLtd or generate 8.8% 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. Stic Investments
Performance |
| Timeline |
| Samil CoLtd |
| Stic Investments |
Samil CoLtd and Stic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samil CoLtd and Stic Investments
The main advantage of trading using opposite Samil CoLtd and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samil CoLtd position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' long position.| Samil CoLtd vs. Inzi Display CoLtd | Samil CoLtd vs. Hanjin Transportation Co | Samil CoLtd vs. CG Hi Tech | Samil CoLtd vs. SBI Investment KOREA |
| Stic Investments vs. Korea Real Estate | Stic Investments vs. Korea Ratings Co | Stic Investments vs. IQuest Co | Stic Investments 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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