Correlation Between I-Components and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both I-Components 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 I-Components and Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between i Components Co and Samsung SDI, you can compare the effects of market volatilities on I-Components 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 I-Components with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of I-Components and Samsung SDI.
Diversification Opportunities for I-Components and Samsung SDI
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between I-Components and Samsung is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding i Components Co and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI and I-Components 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 i Components Co 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 I-Components i.e., I-Components and Samsung SDI go up and down completely randomly.
Pair Corralation between I-Components and Samsung SDI
Assuming the 90 days trading horizon i Components Co is expected to generate 0.22 times more return on investment than Samsung SDI. However, i Components Co is 4.49 times less risky than Samsung SDI. It trades about 0.15 of its potential returns per unit of risk. Samsung SDI is currently generating about -0.11 per unit of risk. If you would invest 460,000 in i Components Co on September 26, 2024 and sell it today you would earn a total of 10,500 from holding i Components Co or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
i Components Co vs. Samsung SDI
Performance |
| Timeline |
| i Components |
| Samsung SDI |
I-Components and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I-Components and Samsung SDI
The main advantage of trading using opposite I-Components and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I-Components 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.| I-Components vs. Samsung Electronics Co | I-Components vs. Samsung Electronics Co | I-Components vs. LG Energy Solution | I-Components vs. SK Hynix |
| Samsung SDI vs. Dongsin Engineering Construction | Samsung SDI vs. Doosan Fuel Cell | Samsung SDI vs. Daishin Balance 1 | Samsung SDI vs. Total Soft Bank |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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