Correlation Between Total Soft and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both Total Soft 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 Total Soft and Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Soft Bank and Samsung SDI, you can compare the effects of market volatilities on Total Soft 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 Total Soft with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Soft and Samsung SDI.
Diversification Opportunities for Total Soft and Samsung SDI
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Total and Samsung is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Total Soft Bank and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI and Total Soft 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 Total Soft Bank 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 Total Soft i.e., Total Soft and Samsung SDI go up and down completely randomly.
Pair Corralation between Total Soft and Samsung SDI
Assuming the 90 days trading horizon Total Soft Bank is expected to generate 1.13 times more return on investment than Samsung SDI. However, Total Soft is 1.13 times more volatile than Samsung SDI. It trades about 0.02 of its potential returns per unit of risk. Samsung SDI is currently generating about -0.06 per unit of risk. If you would invest 453,500 in Total Soft Bank on September 2, 2024 and sell it today you would earn a total of 14,500 from holding Total Soft Bank or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Soft Bank vs. Samsung SDI
Performance |
| Timeline |
| Total Soft Bank |
| Samsung SDI |
Total Soft and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Soft and Samsung SDI
The main advantage of trading using opposite Total Soft and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Soft 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.| Total Soft vs. Devsisters corporation | Total Soft vs. Konan Technology | Total Soft vs. Nice Information Telecommunication | Total Soft vs. InfoBank |
| Samsung SDI vs. Iljin Display | Samsung SDI vs. Aprogen Healthcare Games | Samsung SDI vs. Clean Science co | Samsung SDI vs. Nable Communications |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |