Correlation Between Sungdo Engineering and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both Sungdo Engineering 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 Sungdo Engineering and Samsung SDI 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 SDI, you can compare the effects of market volatilities on Sungdo Engineering 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 Sungdo Engineering with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungdo Engineering and Samsung SDI.
Diversification Opportunities for Sungdo Engineering and Samsung SDI
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sungdo and Samsung is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sungdo Engineering Constructio and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI 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 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 Sungdo Engineering i.e., Sungdo Engineering and Samsung SDI go up and down completely randomly.
Pair Corralation between Sungdo Engineering and Samsung SDI
Assuming the 90 days trading horizon Sungdo Engineering Construction is expected to generate 0.79 times more return on investment than Samsung SDI. However, Sungdo Engineering Construction is 1.26 times less risky than Samsung SDI. It trades about -0.08 of its potential returns per unit of risk. Samsung SDI is currently generating about -0.28 per unit of risk. If you would invest 460,500 in Sungdo Engineering Construction on August 29, 2024 and sell it today you would lose (24,000) from holding Sungdo Engineering Construction or give up 5.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungdo Engineering Constructio vs. Samsung SDI
Performance |
| Timeline |
| Sungdo Engineering |
| Samsung SDI |
Sungdo Engineering and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungdo Engineering and Samsung SDI
The main advantage of trading using opposite Sungdo Engineering and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungdo Engineering 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.| Sungdo Engineering vs. Hyosung Advanced Materials | Sungdo Engineering vs. INNOX Advanced Materials | Sungdo Engineering vs. Hyundai Engineering Plastics | Sungdo Engineering vs. PI Advanced Materials |
| Samsung SDI vs. Atinum Investment Co | Samsung SDI vs. GS Retail Co | Samsung SDI vs. Sungdo Engineering Construction | Samsung SDI vs. DSC Investment |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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