Correlation Between Daishin Balance and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Daishin Balance and Samsung Electronics 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 Daishin Balance and Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daishin Balance 1 and Samsung Electronics Co, you can compare the effects of market volatilities on Daishin Balance and Samsung Electronics 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 Daishin Balance with a short position of Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daishin Balance and Samsung Electronics.
Diversification Opportunities for Daishin Balance and Samsung Electronics
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Daishin and Samsung is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Daishin Balance 1 and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics and Daishin Balance 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 Daishin Balance 1 are associated (or correlated) with Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Daishin Balance i.e., Daishin Balance and Samsung Electronics go up and down completely randomly.
Pair Corralation between Daishin Balance and Samsung Electronics
Assuming the 90 days trading horizon Daishin Balance 1 is expected to generate 1.07 times more return on investment than Samsung Electronics. However, Daishin Balance is 1.07 times more volatile than Samsung Electronics Co. It trades about -0.06 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.21 per unit of risk. If you would invest 602,000 in Daishin Balance 1 on September 2, 2024 and sell it today you would lose (64,000) from holding Daishin Balance 1 or give up 10.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daishin Balance 1 vs. Samsung Electronics Co
Performance |
| Timeline |
| Daishin Balance 1 |
| Samsung Electronics |
Daishin Balance and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daishin Balance and Samsung Electronics
The main advantage of trading using opposite Daishin Balance and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daishin Balance position performs unexpectedly, Samsung Electronics 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 Electronics will offset losses from the drop in Samsung Electronics' long position.| Daishin Balance vs. Pan Entertainment Co | Daishin Balance vs. Korea Air Svc | Daishin Balance vs. Air Busan Co | Daishin Balance vs. Mgame Corp |
| Samsung Electronics vs. Polaris Office Corp | Samsung Electronics vs. Lotte Data Communication | Samsung Electronics vs. Hankook Furniture Co | Samsung Electronics vs. Daou Data Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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