Correlation Between Lion Chemtech and Samsung SDI
Can any of the company-specific risk be diversified away by investing in both Lion Chemtech 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 Lion Chemtech and Samsung SDI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Chemtech Co and Samsung SDI, you can compare the effects of market volatilities on Lion Chemtech 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 Lion Chemtech with a short position of Samsung SDI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Chemtech and Samsung SDI.
Diversification Opportunities for Lion Chemtech and Samsung SDI
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lion and Samsung is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lion Chemtech Co and Samsung SDI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung SDI and Lion Chemtech 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 Lion Chemtech 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 Lion Chemtech i.e., Lion Chemtech and Samsung SDI go up and down completely randomly.
Pair Corralation between Lion Chemtech and Samsung SDI
Assuming the 90 days trading horizon Lion Chemtech Co is expected to generate 1.19 times more return on investment than Samsung SDI. However, Lion Chemtech is 1.19 times more volatile than Samsung SDI. It trades about 0.0 of its potential returns per unit of risk. Samsung SDI is currently generating about -0.07 per unit of risk. If you would invest 336,911 in Lion Chemtech Co on October 25, 2024 and sell it today you would lose (93,411) from holding Lion Chemtech Co or give up 27.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Chemtech Co vs. Samsung SDI
Performance |
| Timeline |
| Lion Chemtech |
| Samsung SDI |
Lion Chemtech and Samsung SDI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Chemtech and Samsung SDI
The main advantage of trading using opposite Lion Chemtech and Samsung SDI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Chemtech 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.| Lion Chemtech vs. Jeju Bank | Lion Chemtech vs. InfoBank | Lion Chemtech vs. Dongil Metal Co | Lion Chemtech vs. Dongbu Insurance Co |
| Samsung SDI vs. Hyosung Advanced Materials | Samsung SDI vs. Kukil Metal Co | Samsung SDI vs. Seoyon Topmetal Co | Samsung SDI vs. Ecoplastic |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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