Correlation Between Samsung Special and Solution Advanced
Can any of the company-specific risk be diversified away by investing in both Samsung Special and Solution Advanced 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 Special and Solution Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Special Purpose and Solution Advanced Technology, you can compare the effects of market volatilities on Samsung Special and Solution Advanced 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 Special with a short position of Solution Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Special and Solution Advanced.
Diversification Opportunities for Samsung Special and Solution Advanced
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Samsung and Solution is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Special Purpose and Solution Advanced Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solution Advanced and Samsung Special 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 Special Purpose are associated (or correlated) with Solution Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solution Advanced has no effect on the direction of Samsung Special i.e., Samsung Special and Solution Advanced go up and down completely randomly.
Pair Corralation between Samsung Special and Solution Advanced
Assuming the 90 days trading horizon Samsung Special Purpose is expected to generate 1.41 times more return on investment than Solution Advanced. However, Samsung Special is 1.41 times more volatile than Solution Advanced Technology. It trades about -0.01 of its potential returns per unit of risk. Solution Advanced Technology is currently generating about -0.06 per unit of risk. If you would invest 315,500 in Samsung Special Purpose on September 15, 2024 and sell it today you would lose (105,500) from holding Samsung Special Purpose or give up 33.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Special Purpose vs. Solution Advanced Technology
Performance |
| Timeline |
| Samsung Special Purpose |
| Solution Advanced |
Samsung Special and Solution Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Special and Solution Advanced
The main advantage of trading using opposite Samsung Special and Solution Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Special position performs unexpectedly, Solution Advanced 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 Solution Advanced will offset losses from the drop in Solution Advanced's long position.| Samsung Special vs. Solution Advanced Technology | Samsung Special vs. Busan Industrial Co | Samsung Special vs. Busan Ind | Samsung Special vs. Sam Chun Dang |
| Solution Advanced vs. Samsung Electronics Co | Solution Advanced vs. Samsung Electronics Co | Solution Advanced vs. LG Energy Solution | Solution Advanced vs. SK Hynix |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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