Correlation Between BGF Retail and Samick Musical
Can any of the company-specific risk be diversified away by investing in both BGF Retail and Samick Musical 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 BGF Retail and Samick Musical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGF Retail Co and Samick Musical Instruments, you can compare the effects of market volatilities on BGF Retail and Samick Musical 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 BGF Retail with a short position of Samick Musical. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and Samick Musical.
Diversification Opportunities for BGF Retail and Samick Musical
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BGF and Samick is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and Samick Musical Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samick Musical Instr and BGF Retail 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 BGF Retail Co are associated (or correlated) with Samick Musical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samick Musical Instr has no effect on the direction of BGF Retail i.e., BGF Retail and Samick Musical go up and down completely randomly.
Pair Corralation between BGF Retail and Samick Musical
Assuming the 90 days trading horizon BGF Retail is expected to generate 4.84 times less return on investment than Samick Musical. But when comparing it to its historical volatility, BGF Retail Co is 1.46 times less risky than Samick Musical. It trades about 0.07 of its potential returns per unit of risk. Samick Musical Instruments is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 105,064 in Samick Musical Instruments on October 12, 2024 and sell it today you would earn a total of 11,736 from holding Samick Musical Instruments or generate 11.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. Samick Musical Instruments
Performance |
| Timeline |
| BGF Retail |
| Samick Musical Instr |
BGF Retail and Samick Musical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and Samick Musical
The main advantage of trading using opposite BGF Retail and Samick Musical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail position performs unexpectedly, Samick Musical 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 Samick Musical will offset losses from the drop in Samick Musical's long position.| BGF Retail vs. Dongbang Transport Logistics | BGF Retail vs. INNOX Advanced Materials | BGF Retail vs. Daejung Chemicals Metals | BGF Retail vs. Kolon Plastics |
| Samick Musical vs. Hansol Chemical Co | Samick Musical vs. BGF Retail Co | Samick Musical vs. JC Chemical Co | Samick Musical vs. Dongnam Chemical 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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