Correlation Between Samji Electronics and Sangshin Electronics
Can any of the company-specific risk be diversified away by investing in both Samji Electronics and Sangshin 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 Samji Electronics and Sangshin Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samji Electronics Co and Sangshin Electronics Co, you can compare the effects of market volatilities on Samji Electronics and Sangshin 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 Samji Electronics with a short position of Sangshin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samji Electronics and Sangshin Electronics.
Diversification Opportunities for Samji Electronics and Sangshin Electronics
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samji and Sangshin is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Samji Electronics Co and Sangshin Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangshin Electronics and Samji Electronics 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 Samji Electronics Co are associated (or correlated) with Sangshin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangshin Electronics has no effect on the direction of Samji Electronics i.e., Samji Electronics and Sangshin Electronics go up and down completely randomly.
Pair Corralation between Samji Electronics and Sangshin Electronics
Assuming the 90 days trading horizon Samji Electronics Co is expected to generate 0.49 times more return on investment than Sangshin Electronics. However, Samji Electronics Co is 2.02 times less risky than Sangshin Electronics. It trades about -0.22 of its potential returns per unit of risk. Sangshin Electronics Co is currently generating about -0.25 per unit of risk. If you would invest 875,000 in Samji Electronics Co on September 1, 2024 and sell it today you would lose (37,000) from holding Samji Electronics Co or give up 4.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samji Electronics Co vs. Sangshin Electronics Co
Performance |
| Timeline |
| Samji Electronics |
| Sangshin Electronics |
Samji Electronics and Sangshin Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samji Electronics and Sangshin Electronics
The main advantage of trading using opposite Samji Electronics and Sangshin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samji Electronics position performs unexpectedly, Sangshin 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 Sangshin Electronics will offset losses from the drop in Sangshin Electronics' long position.| Samji Electronics vs. Dongsin Engineering Construction | Samji Electronics vs. Doosan Fuel Cell | Samji Electronics vs. Daishin Balance 1 | Samji Electronics vs. Total Soft Bank |
| Sangshin Electronics vs. Daejoo Electronic Materials | Sangshin Electronics vs. Parksystems Corp | Sangshin Electronics vs. BH Co | Sangshin Electronics vs. Partron 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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