Correlation Between Sungdo Engineering and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Sungdo Engineering and Samsung 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 Sungdo Engineering and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungdo Engineering Construction and Samsung Electronics Co, you can compare the effects of market volatilities on Sungdo Engineering and Samsung 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 Sungdo Engineering with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungdo Engineering and Samsung Electronics.
Diversification Opportunities for Sungdo Engineering and Samsung Electronics
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sungdo and Samsung is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sungdo Engineering Constructio and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Sungdo Engineering 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 Sungdo Engineering Construction are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Sungdo Engineering i.e., Sungdo Engineering and Samsung Electronics go up and down completely randomly.
Pair Corralation between Sungdo Engineering and Samsung Electronics
Assuming the 90 days trading horizon Sungdo Engineering Construction is expected to under-perform the Samsung Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Sungdo Engineering Construction is 1.29 times less risky than Samsung Electronics. The stock trades about -0.21 of its potential returns per unit of risk. The Samsung Electronics Co is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 4,655,000 in Samsung Electronics Co on October 17, 2024 and sell it today you would lose (245,000) from holding Samsung Electronics Co or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungdo Engineering Constructio vs. Samsung Electronics Co
Performance |
| Timeline |
| Sungdo Engineering |
| Samsung Electronics |
Sungdo Engineering and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungdo Engineering and Samsung Electronics
The main advantage of trading using opposite Sungdo Engineering and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungdo Engineering position performs unexpectedly, Samsung 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Sungdo Engineering vs. Pureun Mutual Savings | Sungdo Engineering vs. Dongbu Insurance Co | Sungdo Engineering vs. INNOX Advanced Materials | Sungdo Engineering vs. PI Advanced Materials |
| Samsung Electronics vs. Eagle Veterinary Technology | Samsung Electronics vs. CU Tech Corp | Samsung Electronics vs. Sungdo Engineering Construction | Samsung Electronics vs. Solution Advanced Technology |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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