Correlation Between Samsung Publishing and Daedong Metals
Can any of the company-specific risk be diversified away by investing in both Samsung Publishing and Daedong Metals 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 Samsung Publishing and Daedong Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Publishing Co and Daedong Metals Co, you can compare the effects of market volatilities on Samsung Publishing and Daedong Metals 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 Samsung Publishing with a short position of Daedong Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Publishing and Daedong Metals.
Diversification Opportunities for Samsung Publishing and Daedong Metals
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samsung and Daedong is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Publishing Co and Daedong Metals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daedong Metals and Samsung Publishing 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 Samsung Publishing Co are associated (or correlated) with Daedong Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daedong Metals has no effect on the direction of Samsung Publishing i.e., Samsung Publishing and Daedong Metals go up and down completely randomly.
Pair Corralation between Samsung Publishing and Daedong Metals
Assuming the 90 days trading horizon Samsung Publishing is expected to generate 9.25 times less return on investment than Daedong Metals. But when comparing it to its historical volatility, Samsung Publishing Co is 2.4 times less risky than Daedong Metals. It trades about 0.05 of its potential returns per unit of risk. Daedong Metals Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 643,000 in Daedong Metals Co on August 29, 2024 and sell it today you would earn a total of 214,000 from holding Daedong Metals Co or generate 33.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Publishing Co vs. Daedong Metals Co
Performance |
| Timeline |
| Samsung Publishing |
| Daedong Metals |
Samsung Publishing and Daedong Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Publishing and Daedong Metals
The main advantage of trading using opposite Samsung Publishing and Daedong Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Publishing position performs unexpectedly, Daedong Metals 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 Daedong Metals will offset losses from the drop in Daedong Metals' long position.| Samsung Publishing vs. AptaBio Therapeutics | Samsung Publishing vs. Daewoo SBI SPAC | Samsung Publishing vs. Dream Security co | Samsung Publishing vs. Microfriend |
| Daedong Metals vs. Cuckoo Electronics Co | Daedong Metals vs. Derkwoo Electronics Co | Daedong Metals vs. LG Electronics | Daedong Metals vs. Seoul Electronics Telecom |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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