Correlation Between MS Autotech and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both MS Autotech 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 MS Autotech and Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MS Autotech CoLtd and Samsung SDI, you can compare the effects of market volatilities on MS Autotech 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 MS Autotech with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of MS Autotech and Samsung SDI.
Diversification Opportunities for MS Autotech and Samsung SDI
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 123040 and Samsung is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding MS Autotech CoLtd and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI and MS Autotech 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 MS Autotech CoLtd 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 MS Autotech i.e., MS Autotech and Samsung SDI go up and down completely randomly.
Pair Corralation between MS Autotech and Samsung SDI
Assuming the 90 days trading horizon MS Autotech CoLtd is expected to generate 0.82 times more return on investment than Samsung SDI. However, MS Autotech CoLtd is 1.22 times less risky than Samsung SDI. It trades about -0.22 of its potential returns per unit of risk. Samsung SDI is currently generating about -0.35 per unit of risk. If you would invest 312,000 in MS Autotech CoLtd on September 3, 2024 and sell it today you would lose (42,000) from holding MS Autotech CoLtd or give up 13.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MS Autotech CoLtd vs. Samsung SDI
Performance |
| Timeline |
| MS Autotech CoLtd |
| Samsung SDI |
MS Autotech and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MS Autotech and Samsung SDI
The main advantage of trading using opposite MS Autotech and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MS Autotech 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.| MS Autotech vs. EV Advanced Material | MS Autotech vs. Top Material Co | MS Autotech vs. Shinsegae Food | MS Autotech vs. Foodnamoo |
| Samsung SDI vs. Wave Electronics Co | Samsung SDI vs. Haitai Confectionery Foods | Samsung SDI vs. Sangshin Electronics Co | Samsung SDI vs. Shinil Electronics 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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